Takes energy to split h2o. More than is given back due to inefficiencies (entropy?)
Yes, but the energy, in this case, comes from the sun. So the difference between 100% efficiency and 90% efficiency due to losses doesn’t really matter.
As with any process, you have to consider the total energy required.
Although free, how much mass does the whole process add to the weight of the vehicle? That includes a stable “earth-like” environment for the reaction to occur, containment systems, waste management, etc. Does it follow the laws of diminishing returns and the added energy produced is consumed by the accelerating the mass of the reaction system.
Remember that you have to produce more energy than you consume.
Also, what about fault tolerance and system redundancy? After all, the survival of the mission and the astronauts depends on it. If lost, are the reaction materials easily recovered or reproduced?
Fusion has a better chance of success, IMHO. Simple is better.