Well, for the sake of it, I must say that I enjoyed the Hover Pack in Super Mario Sunshine as much as I enjoyed the Raccoon Tail in Super Mario Bros. 3. Now, the Tanooki Suit, Kuribo's Boot, Frog Suit, and Hammer Bros. Suit were better, but the Raccoon Tail and Water Pack were about on the same level to me, and upgrades of similar nature.
Essentially, both made the game more focused on jumping and allowed greater platforming feats. The problem is that the Hover Nozzle was required for nearly everything. Really, I'd have much preferred the thing have run out of water easier, be more difficult to fill, or just disappear when Mario got hit. I would have liked some secret areas that only Water Pack Mario could reach that were really hidden, or had a SCUBA Suite/Frog Suit for Mario that would work better than the normal Hover Pack did. Ideally, though, I would have appreciated a Raccoon Tail in the game over the entire switchable nozzle side of the Water Pack. You could fly to the heights the Jet Nozzle allowed, and slowly fall to get the distance of the Hover Nozzle. Classic Mario meets Mario 64, IMO. The Tail shouldn't have been needed for everything, and would go away with a hit.
Of course, I think the normal water Spray Nozzle was a bad choice. At times, it was too strong, at other times, it did nothing or little to enemies, and at even other times, it was too mandatory. If the Fire Flower could have been in the game, it would have been able to double up this purpose, yet have been less mandatory.
That said, I like Super Mario Sunshine more than Super Mario 64, it's just at the point in time it was released, I was better trained to pick out flaws and annoying things. The Water Pack was definitely a step toward incorporating the old SMB 3 gameplay into the SM 64 environment, I just think it could have been done better.