We confess that, in Baptism, the key thing is not simply the water, but what has been added to it. Even with ordinary uses of water, it is common for us to think this way. For instance, it's not the water but the flavoring and fizz added to it that make soda what it is, or the barley, hops, and fermenting yeast that make beer what it is. In a much greater way, it is the Name and Word of God connected to the water that make baptism what it is. In fact in the baptism of our Lord, we see that the Word made flesh is in the water Himself. Thus, baptism is the Gospel. It is Jesus. It delivers Him and all His gifts to us in and with the water poured over us. To reject baptism or its saving power is to reject the Word contained in it. Luther comments this way in the Large Catechism:
"From this now learn a proper understanding of the subject, and how to answer the question what Baptism is, namely thus, that it is not mere ordinary water, but water comprehended in God's Word and command, and sanctified thereby, so that it is nothing else than a divine water; not that the water in itself is nobler than other water, but that God's Word and command are added.
"Therefore it is pure wickedness and blasphemy of the devil that now our new spirits, to mock at Baptism, omit from it God's Word and institution, and look upon it in no other way than as water which is taken from the well, and then blather and say: How is a handful of water to help the soul? Aye, my friend, who does not know that water is water if tearing things asunder is what we are after? But how dare you thus interfere with God's order, and tear away the most precious treasure with which God has connected and enclosed it, and which He will not have separated? For the kernel in the water is God's Word or command and the name of God, which is a treasure greater and nobler than heaven and earth.
"Comprehend the difference, then, that Baptism is quite another thing than all other water; not on account of the natural quality but because something more noble is here added; for God Himself stakes His honor, His power and might on it. Therefore it is not only natural water, but a divine, heavenly, holy, and blessed water, and in whatever other terms we can praise it, all on account of the Word, which is a heavenly, holy Word, that no one can sufficiently extol, for it has, and is able to do, all that God is and can do [since it has all the virtue and power of God comprised in it]. Hence also it derives its essence as a Sacrament, as St. Augustine also taught: Accedat verbum ad elementum et fit sacramentum. That is, when the Word is joined to the element or natural substance, it becomes a Sacrament, that is, a holy and divine matter and sign.
"Therefore we always teach that the Sacraments and all external things which God ordains and institutes should not be regarded according to the coarse, external mask, as we regard the shell of a nut, but as the Word of God is included therein. . .
"Thus, and much more even, you must honor Baptism and esteem it glorious on account of the Word, since He Himself has honored it both by words and deeds; moreover, confirmed it with miracles from heaven. For do you think it was a jest that, when Christ was baptized, the heavens were opened and the Holy Ghost descended visibly, and everything was divine glory and majesty?
"Therefore I exhort again that these two, the water and the Word, by no means be separated from one another and parted. For if the Word is separated from it, the water is the same as that with which the servant cooks' and may indeed be called a bath-keeper's baptism. But when it is added, as God has ordained, it is a Sacrament, and is called Christ-baptism."
(Large Catechism, Holy Baptism, 14-19,21-22)