Because it's a ranged attack with a thrown weapon. I don't see why Paladins and Clerics (who will likely have their own, much more powerful Radiant powers) would even use Holy Water.
Yeah, but their attacks are probably not minor actions. A laser cleric who has a spare minor action could easily use the holy water to do a bit of extra damage. Not every character needs to have good dex to chuck a vial at something. I like the static attack bonuses on such items. There is a weapon using class for every stat, why is it hard to imagine you don't really need good dex to throw a vial? You can throw it with your intelligent precission or handsome looks. It really shouldn't matter.
It's fun as a great weapon fighter if I can chuck a vial of holy water at one zombie, charge the one next to it, and have both of them marked. Or if I'm a shaman who just hit a wraith with Twin Panthers, I like the option of chucking a vial of holy water at the target while I still have combat advantage. Forcing the use of dex removes a horde of possibilities.
I know that, but this minor action holy weapon just rubs me the wrong way. So throwing an axe is a standard action, but hurling a vial is a minor action? Why? Call me old-school, but throwing something - vial, axe, mug of ale, whatever - should be the same action.
Throwing a weapon is normally a standard action, but sometimes it's a minor action, sometimes it's an interrupt, and sometimes it's a free action. Type of action is just a balance factor for combat resolution.
Also, I don't see why higher level vials are easier to hit with.
Because they are more potent, and can get through tough skin/hide/armor, etc and works its magic into the forces holding the undead together.
Standard action. No level at all. Can't remember the cost (and to lazy to go look it up right now), but something like 25 gp maybe.
This approach means a level 30 character can have bushels of them. It's part of the reason why the whole level/cost/attack bonus balancing system is used. Of course in your case with the attack being standard action based on dexterity with no bonuses, it's highly unlikely anyone above heroic level would bother.
Suffer? Throwing things in an accurate way sounds like Dex to me. If your paladin or cleric has low Dex, let the rouge throw the Holy Water and do something better yourself.
If it's a standard action, yeah, everybody is going to do something better, so I guess it's a moot point what stat it's based off, but see my argument to UltimaGabe for why I think it should be more flexible.