It depends on the type of smoker. In the vertical smokers the water pan helps to regulate temps. It acts as a thermal buffer because of the amount of heat that water can hold. When you open the door on a vertical to add wood, or spray the meat, a lot of heat escapes and the hot water in the pan helps the smoker return to temp more quickly.
On horizontal offsets, a water pan is more of a personal choice. Some use it as a makeshift baffle and tuning plate.
Hope this helps and is not TMI!
Take care, have fun, and do good!
Regards,
Meowey