How can the dielectric constant of water be so high but water on electric devices can cause a short circuit?
Consider a hypthetical situation.

The dielectric constant of water Dk=80
   vs air=1 vs  FR4= 4.6 

Clean rain between exposed power socket > 10M Ohm causing 24uA  leakage @ 240Vac between contacts and some leakage to ground. 

Acid Rain between exposed power socket > 1k ohm causing 240mA steam @ 240Vac and salt accumulation when bridged can cause an arc breakdown short overtime burning contact insulation then worse.

In Electronics, it can degrade the performance of high impedance switches from dust &amp; Water to the point of failure within hours.

When clean water gets onto dust boards with the slightly acidic ions of no-clean solder flux it can corrode exposed copper and bridge tracks overnight after it dries or under SMD with trapped dusty water.    

The high Dk can also increase signal rise times by up to 80x if spanning the whole track to a ground track and corrupt synchronous operations.