I believe that fusion converts hydrogen into helium. So eventually you would run out of fuel. Also if using h2o what do you do with the excess oxygen?
I think the idea behind fusion is you can generate more energy than is needed to produce hydrogen and contain the plasma using lasers or magnetic fields. So once they get over those two hurdles we will have a new source of energy.
So far they have not produced enough energy for those two things, but they are getting close.
Oxygen can be bottled for industrial use or to use in medicine.