See this is outright ignorant. The garden doesn't require a river anymore. The garden just requires aqueducts. The fact that you (and presumably other people) took this into consideration in considering river cities better (which they should be, at the very least because they make moving your units extremely annoying until later if not history) proves that the push for and nerf of the watermill was unreasonable.
As Enrico said, the watermill costs almost twice the production of the well, comes 5 techs later than the well (if you beeline it, which you won't, so probably 8-11 techs later at earliest) for a benefit of 1 base production and a staggering 1f/1p per 20 citizens. If anything the watermill was worse than the well to begin with, because the well provides a solid production boost cheap and early with no dependance on workers, whereas the watermill comes MUCH later, costs almost twice the production and and in a 40 pop city prodivdes a grand total of 3f/2p extra.
Now that I look at the numbers nerfing the watermill makes it the worst building in the game by far, and should be undone asap. (Or moved to wheel and made to cost the same as the well, giving river cities 1 food over non-river.)
Now river cities are actually worse than non-river (aka settling 1-2 tiles away from rivers so you can still have fresh water farmland.) because all they get are baths and later hydroplants while costing you the well, slowing your tile improvement due to the hassles of moving your units around your rivers, and hindering your non-scout military without amphibious. (While being sometimes easier to defend, but how often is a good player on the defensive in war?)