Well, I do line mine, but I'm not quite sure WHY. It seems that an hour after lining my waterline, it's gone. Granted, I don't use something as high quality as a MAC fluidline, so this can be the reason.
Also, I have been told by my eye doctor that it's actually dangerous to apply makeup on the waterline, since it can lead to clog tear ducts and a whole bunch of otherwise ill effects. However, I have yet to have this happen to myself, or anyone I know--at least, this hasn't happened due to MAKEUP application. My boyfriend wound up with something like this, though obviously not from makeup. Thank goodness.