lol. you did it to yourself. those are the best kinds of DOH!!!
I don't think the slaying crit was to much. After all, it still took three rounds to drop it.
Rather than damaging the PC's with heat, a cloud of steam could have hindered vision, allowing the elemental to gain flank/surprise/rear with its attacks, the party losing sight (and thus breaking the Heat Water attack, forcing a new attack roll with rr after reacquiring and rolling init). Still, I think the extra heat crit was a good idea.
When the player decides to boil his water flask, a manipulate liquid spell and spell mastery should be required to add the heat damage to the bolt. For the elemental, it was a side effect. To do so purposefully should be very hard.
Cool story though.