This right here is the answer. The Rehbinder Effect basically describes the observation that surfacants (a chemical that reduces the surface tension between substances such as soap) reduces the hardness (a measure of localized plastic deformation) and the ductility (how easily a substance can be drawn) of a material, thus making it easier to deform and manipulate. By submerging the glass inside water, you can reduce the cutting force of the drill and better control the rate of abrasion. In this scenario, water is being used as a lubricant.