You mean like an enormous cataclysmic flood?
Water is not a low-oxygen environment.
More likely, this dinosaur was entombed in a landslide or something similar. This is an interesting find, but like the T-Rex soft-tissue (which wasn't really the soft-tissue itself, but the mineralized replacement), it's probably just a really unusual situation.
Steam and boiling water hold no gasses at all, and both were the dominant forms of water during the 'flood.'
Water itself may not be, but during a cataclysmic flood, it can create that type of environment. To wit, 1500 Guatemalans were buried in a mudslide caused by a few days of torrential rains. So I guess we both could be correct (landslide caused by lots of water).
The point is this: it is all conjecture and either conclusion is an act of faith because we weren't there to witness the event.