Here's why:
* It's a beach: The name is a play on "lagoon," which is a body of water. It's a place for swimming and sunbathing, activities that require water.
* We see SpongeBob swimming in it: He and his friends often swim, dive, and play in Goo Lagoon, which wouldn't be possible if it were actual goo.
* The show's style: SpongeBob is a cartoon, and exaggeration is part of its charm. The "goo" aspect is meant to be funny and over-the-top.
So, while Goo Lagoon may look like goo, it's definitely water, just a very unusual, vibrant, and slightly disgusting kind!