"Better" is a highly subjective. Better for what? For hydration, for the "I'm running a marathon, what's best to drink in the middle of the race to remain hydrated" water would be "better". In terms of nutrients: calories, protein, calcium, potassium and so on, milk is "better" than water since water contains no nutrients.
A healthy diet could include both skim milk and water, so the question is really moot. 32 oz of milk a day would completely satisfy the RDA of calcium and about half of a person's protein requirements on a 2000 calorie diet for a day. Given that most people consume more fluid than this in a day, the rest could very well be water.
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