actually it wasn't stopped, look at the bow, you'll see it slicing through the waves. since the fire is in the stern, they need to keep it moving into the wind so they can see what they're doing. if you watch the fire hoses you can see the mist getting caught in the wind and blowing off to the side. in a later scene you see the smoke going straight up, thats when its not moving/or drifting with the wind. in the yorktown fire, you can see its broadside to the wind and drifting. even then there is enough wind to give it that billowing affect.
as for it becoming more solid, you are correct that at distance it does do that. but we're not reconstructing historical photo's, we're trying to make the game something of its own. if the fire isnt perfect, who cares, its that much more effect then was there before ranger started messing around with it. good bad or indifferent, most will agree it enhances the game and thats all that matters to most of us that play on a regular basis!
