Because small pumps can't pump water that fast... and the faster the water can move, the faster the heat transfer. Now as for the radiator, if it's not fast or strong enough, the heat dissipation rate is not going to be able to keep up with the heat transfer rate. For water-cooling to be really effective, you have to use really fast pumps and really strong radiators. If you use the portable kinds, chances are, the cooling won't be too great, and you expose your computer to the risk of being damaged by water leakage.
This is why air cooling is still preferred by many, especially LAN party goers.
And this is why my mATX computer is an extreme air one.
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Computer specs:
CPU: Intel Celeron M 450MHz
RAM: 1GB DDR2 100MHz
Storage: 4GB SSD + 8GB SDHC
Monitor: 7" LCD WVGA 800x480
OS: Windows XP Professional w/ SP3
Road warrior operation duration: 4h30m! (extendable to 6h30m!) 