Early in the cartoon, Misty pulls out her Goldeen to fight Team Rocket, but it just flops around uselessly on the floor of the PokeCenter. This and common sense show us that not all water pokemon can be used on land, to battle or otherwise. The following list shows which pokemon are and are not appropriate to have outside of the water.
Can be used on land:
Starmie, Staryu, Slowpoke, Slowbro, Slowking, Krabby, Kingler, Vaporeon, Psyduck, Golduck, Squirtle, Wartortle, Blastoise, Poliwag, Poliwhirl, Poliwrath, Politoed, Seel, Dewgong, Shellder, Cloyster, Gyarados
Cannot be used on land:
Tentacool, Tentacruel, Horsea, Seadra, Kingdra, Goldeen, Seaking, Lapras, Magikarp
If you have one of the water-only types, remember what Misty says! "You should try to take your pokemon to the ocean or a lake... or even a pool or a fountain for exercise every day!" Have you ever had a RP scene where you were in the ocean up to your hips, watching your Goldeen leap through the waves as it moves in towards the Horsea for a hit? Have you ICly visited Daisy or Misty and asked for use of their gym pools to exercise your pokemon? Well, now you have reason to!