found these pics on a 350z forum

 

I wonder if any of those pics were the result of running hard water in their water injection systems.

 

How much water were they spraying? I couldn't see a small mist to cool the incoming air causing that much damage.

 

It all depends on the water droplet size as far as i can tell.. when you have a peice of metal moving that fast (50-100k rpms) i can see water casuing erosions problems pretty quick.
See alot of guyins trying to spray the mist right on the nut holding the comp on, so i guess they are trying to keep the water from hitting the tips of the blades?

 

Also it seems like water just sitting in the compressor housing (or running down the intake tube to the turbo) seems to cause most of the troubles.

And yes, the tip speed is the fastest, so it would cause the most damage there.