To me, the Water Temple wasn't a heaping pile of difficulty like some people make it out to be. As long as you know where to go first, and you complete all the puzzles (obtaining all the small keys), this dungeon really isn't that bad. I'd even say it's not any more harder than any of the other adult temples in Ocarina of Time, besides perhaps the Fire Temple.
Overall, my vote goes to "The temple is not too hard but not too easy." Many parts of it have their fair share of difficulty, such as the mini-boss battle against Dark Link, the room where you have to swim around the whirpools, and most of the puzzles. Although, there were a few easy parts, including the boss battle against Morpha. Morpha was a bit difficult, but a pretty simple boss, overall.
I wish Nintendo would take notes on how they practically perfected the dungeon design and difficulty of, not only the Water Temple, but all of the temples in Ocarina of Time.