Rohan,
It’s a complicated set of trade-offs. The biggest decider (in practice so far) seems to be the issue of pointing and tracking. This is (more) easy with a LED (or any diffuse source) than a highly colimated source like a laser. It’s up to the system designer to decide whether they want to spend money/power on better pointing and tracking or generating enough optical power with LEDs to transmit the required distance.
Source coherence seems to play little effect (so far) as the scattering from the channel destroys the coherence. You can check out this paper for more reference: http://www.mendeley.com/research/effects-underwater-turbulence-laser-beam-propagation-coupling-singlemode-optical-fiber-2