Here is what I have found so far: 
"The switch to water-cooling for the boxer engines was made abruptly 
mid-year in 1983 because VW could no longer make the air-cooled 
engines meet emissions standards" 

Over the years I have heard this reason as well. However, according to Wikipediea, Porsche continued to make air cooled boxer engines until 1996 ( I thought it was 1989). Maybe it was 1989 when the last air cooled boxer engine was available in the 911 in the US.         Jeff