I'm not going to identify all the different people and posts I'm trying to answer here, more of a combined answer.
The penalty for a ball OB must be at least as severe as for a ball that is lost since a ball that is OB is a the result of a worse shot that that of most lost balls and the penalty should fit the crime. The penalty for a lost ball must be at least distance only since we can't know where to drop if we don't have some point to go from. For example for a ball lost in a water hazard we do have a point, which is where the ball last crossed the margin of the hazard. For a ball hit in 3" rough it wouldn't be right to drop in the fairway because that is where the ball last crossed the margin of the rough. For a ball hit into trees or a bush, it also doesn't seem right. For a ball that was hit somewhere and we don't really know where, we really have no point of reference..
Given that the penalty for a lost ball must be the most severe, that would mean that the maximum penalty would be the same for a ball in a water hazard or unplayable. If it was distance only as has been tried in the past, that would mean that I could find my ball in a horrible spot, declare it unplayable and go back and try the shot again with no penalty. There was a case of this in the Open at Troon in the 1960s where a player on the Postage Stamp hit a ball into a horrible lie in a bunker, he chose the distance only option of the unplayable lie rule, went back to the tee, hit it to a foot and made a par. The ruling bodies felt this was letting him get too much relief by choosing distance only as there was almost no way he could have made par from the original lie and so the rule changed back to S&D.
A ball cannot be "declared lost". The only ways a ball becomes lost are: 5 minute search, stroke is played at a substituted ball, the provisional is played at the place the ball is likely to be lost or nearer the hole.
Too much OB is not clown mouthish from the rules point of view as much as it is bad design.
When it comes to provisionals, they can be played any time that a ball might be OB or lost outside a water hazard. If there is an area where there is a water hazard and other areas where the ball might be lost, you can play a provisional, but you will have a tough time proving reasonable evidence that the ball is in the water hazard. Also, if you play a provisional because you didn't realize that the area was a water hazard, you are ok, but you have to abandon the provisinal once you find out it is a water hazard.
The reason you can't play a provisional for a ball in the water hazard is because you could end up with multiple balls in play and get to choose which one you like best. Similarly, you can't play or use a provisional for an unplayable ball since you are the one who determines when the ball is unplayable and that choice would be biased by the location of the provisional.
There are occasional times where a provisional is allowed for a ball in a water hazard under local rule. See page 92 of the Rules of Golf for the wording. It should only be used when the other options are not good and it would save a lot of time. One hole where I've seen it is #18 at Pumpkin Ridge - Witch Hollow course where it is a 10 minute walk around/through the hazard and you really don't have any options for most shots that do end up in the hazard. It is either there or it isn't, but you can't tell from the tee due to the high bushes. In choosing to play the provisional, you give other options under the water hazard rule except for playing the ball as it lies.
When Phil hit his tee shot in the canyon during the playoff at Torrey Pines, the area was not marked as a hazard as it was this year. Therefore he correctly played a provisional for a ball lost outside a water hazard. Once his ball was found, he had to abandon the provisional. At that point, he chose to declare the ball unplayable. His only viable option was to go back to the tee.
For a ball to be considered lost in a water hazard, there must be "Reasonable Evidence" to that fact. The PGA/USGA defined that as 95-98% sure at the rules workshops I've attended. That basically means, it can't be lost anywhere else.
The group can't just say, "Oh that ball is probably in the water." There needs to be reasonable evidence that it is there. There are groups where the statement would mean that and there are groups where it wouldn't. The player should be responisble for making that decision, not the groupa and if he has any integrity he will err on the side of it not being in the water.
I hope this helps your understanding of the rules and why they are the way they are.