No expert but water-soluble adhesives like wheatpaste and such rely on the water getting absorbed or evaporated. In an industrial setting I guess that makes it too slow.

Also in an industrial setting I can see an advantage of eliminating an ingredient.

As for removing labels off bottles, I seem to recall my grandpa putting the bottles in a bucket of water and washing soda (sodium carbonate), and just letting them marinate for a good while. Wasn't super hard but a bit of a chore like you say.