This has been talked about in my class a lot (today in fact!). My proffesor has been following it. Supposedly, the engine was so powerful that the guy pressed the gas 1/4" and the tires started burning up. Then he tweaked it to limit the energy.
Then he took it for a ride (this part is all just speculation) and someone pulled infront of him, and they pull a gun and show pictures of his family and tells him to destroy anything related to it.
Regradless of that, there is no question that it could financially be the end for America. Gas tax, and everything to do with oil is a major part of the economy, and the government can't tax water, even if they try, there are lakes and whatever that you could get water from. Therefore, the government won't let this technology go any further until they can find a way tax it.
IMO, this is the best for our enviorment. However, when this is allowed, it's not going to save us any money. It's merely going to be an alternative that is better for the enviorment, but the price will be costing the same one way or another.