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In this battle in the anime Charizard beat Blastoise because he couldnt aim his cannons, since Blastoise was too close. Charizard then finished him with seismic toss.
If Blastoise could shoot water from its mouth, he could've hit Charizard in the face point blank.
So it's either:
1. He can't, only with his cannons
2. Blastoise and/or Gary are retarded
3. The anime makes no sense