If o-rings work so well ..
why did the poster write :
"but the O-ring had become hard and lost its seal over the years."

I'll say that even a used o-ring with a high quality black silicone on
that surface will easily last at least the life of the water pump.

Why is a sealant used on the rubber outer water gaskets on waterboxer
engines ?
same answer....
bare rubber-to-metal does not seal very well after a while.
( not exactly comparable , granted. )

I just see a lot of leaking cooling system o-rings,

why do many modern toyota's mount their water pump bare to the block ..?
( except for their good black sealant  being used there )
............because it flat works,.

details in workmanship.
Just putting the part on is incidental to the actual process of doing a
repair that lasts really well.

for example...I almost never put any bolts in bare metal. I always put
something on the threads..
so they wont' corrode, and so they come out years later very nicely.

for that I often use .......either .
Permatex high tack gasket sealer.
ant-seize compound,
teflon paste from the hardware store.

# 1 and 3 in particular ..help .stick the screws in nicely
.........prevent corrosion ( the main enemy ) and allow the fasterners
to unscrew years later very nicely.

busted off cooling system fasteners  like thermostat housing screws are
no fun.
Both the 2.1 and 1.9 wbxr,   , and diesel vanagon ....all can suffer
from stuck-in and corroded cooling system screws ..
particularly the 6mm thread ones.  ( usually 10 mm hex head ) .
   It's really really nice when they come out very nicely years later.

I use a lot of sealants and various similar products...all to make it
last, and make it easy to work on in the future.

S.