1) Adventuring underwater is fun. But if you don't allow folks to cast spells underwater, then it won't be fun for wizards and sorcerers and, to a lesser degree, clerics, druids, and bards.
2) Ruling that waterbreathing allows normal speech is not unbalancing. That is, it doesn't create a new "must-have" tactic that everyone will always use. (People who want to breathe underwater will probably use the spell whether or not it allows spellcasting).
3) Waterbreathing allows the subject to "breathe water freely." Breathing involves inhaling and exhaling. Speech involves exhaling across your vocal cords. If you can freely exhale across your vocal cords, you can speak.
4) Due to the wonders of the "ignore" function, I've missed some of the thoughts in this thread. However, since some of the ignored posts show up as quotes in other people's posts, I'm perfectly satisfied that I'm not missing much.
To recap: when the real-world answer to a question is unavailable, DMs should evaluate the game-world answer based on fun, then balance, then strict rules reading, and finally analogous physics. I think all four of these criteria point to allowing the use of verbal components underwater. And if someone consistently posts obnoxious straw-man distortions of your own posts, check out the ignore function.
Daniel