Blue stain fungi require a relatively high temperature and humidity, and oxygen to grow. Watering logs attempts to serve two purposes. One is to keep the temperature lower by evaporation on the log surface, and the other is to keep the log "drowned", preventing a source of oxygen for the fungi. As you can now imagine, the problem is keeping enough water on the logs to not allow any oxygen, and having the conditions for evaporation on the surface. Another problem also arises, in that the log remains saturated.
In my experience drying 15MMBF of white pine annually, the best method to prevent blue stain is to get the wood drying as soon as possible. Stain can start in a matter of hours, so getting air around the log helps its surface to start drying, but the best thing is to get it turned into lumber in less than two weeks, and on sticks and drying, preferably in a kiln, but at least under cover of some sort and with some sort of air circulation. The lumber needs to be below 30% e.m.c. to be safe from stain, but as long as the surface is starting to dry, you are in much better shape.
There are some chemicals that also work somewhat, that is a whole nother discussion. Many large white pine mills do water logs, but a getting lumber immediately into a good dry kiln is very critical.
In some cases, if you are dealing with lower volumes, if you can stain the logs and feed the bugs, and are good at marketing, you can sell it as character wood, ($$) but that is difficult to do by the millions of BF.