The reason that water balloons are a good idea (in addition to being a lot of fun) is that you don't need a special plane to haul them around. You just need any plane with a cargo door capable of lifting stuff. The balloons (really just 250 gallon plastic bags) are filled up on the ground inside reinforced cardboard boxes to keep them stable, and then hauled off to the fire but whatever planes you have handy and shoved out the door. When they hit the airstream, the boxes and bags disintegrate, and the effect is basically the same as if you'd had a tanker aircraft dump a bunch of water instead.
If you're worried about some poor little baby animal trying to eat the shredded plastic bag for some reason, you should remember that it's being dropped DIRECTLY ON TO A FOREST FIRE, and even if it wasn't, everything's made to be biodegradable and environmentally friendly and all that.
Boeing's Phantom Works has been working on PCADS (Precision Container Aerial Delivery System) for several years now, but it's just about ready for deployment, after a little bit of extra testing including a C-17 dropping 40 PCADS water balloons all at once, amounting to a record-setting 10,000 gallons of water.