Huge problem, freshwater is actually very dangerous to human beings. How is that, you might ask? Well most everything that kills humans just loves freshwater, its a great medium to grow life in. Mosquitoes breed in most every body of standing water, and in any deepish body of water their population can grow massive. Mosquitoes also transmit terrible diseases which would spread rapidly through a working population already weak from exhaustion, the heat, and overwork. Even in a healthy population, sanitation was never good enough to prevent epidemics. And these pools are essentially epidemic machines.

Thats because Mosquitoes arnt the only nasty thing that loves to live in freshwater. A host of parasites and bacteria love standing freshwater. Standing freshwater which would regularly have sweaty, stinky, unwashed workers standing in it. Workers which would provide an excellent home and protein slurry (sweat, urine, feces, ect.) to grow in. And remember, a symptom of Dysentery is uncontrollable Diarrhea, which has the potential to transmits the disease . In a pool. With other workers. Filled with water that never gets changed. You can imagine how horrific this kind of water system would become very quickly.

This kind of building method would likely build a pyramid of corpses well before it would construct a pyramid of stone.

Edit: here is the Badhistory thread which really pulls apart this concept, and discusses several flaws in the theory.