Water injection allowed for pulling higher temps in turbine and piston engines when using a turbo or supercharger system. The piston engines will run hotter when the manifold pressure is boosted way up and turbines engines just naturally run higher TOT or EGT when pulling extreme power levels. The water alcohol lowers the temps enough so that you can get away with the high boost pressure for a longer period of time.
In a normally aspirated engine, it will increase the density of the fuel air charge and increase efficiency of the burn. What you save in fuel mileage is partially taken by the water alcohol mix to some extent. Kind of *** for tat but if a guy wants to save every penny then what the heck. Gas is till more expensive and I'd rather we used the alcohol in this way that put it in the gas tank for sure..