I can’t answer specifically, as I am not a geologist :/
But I believe they require plenty of water because they need to be fire resistant. Hence why they would live in rich moist soil, but it may also need a lot of water because of growth. But as it grows to be huuuuge, in order to get water to the very top of the tree it needs a constant unbroken supply of water. If you take a water droplet on your finger, it takes a while to drop off your finger, even when it is turned upside down. This is because water has a kind of adherance- water molecules like to stick together and trees make use of that fact to pull water up to the top of the tree. Therefore it needs a lot of water.

It needs water to be fire resistant because forest fires are common- the rich moist soil would help it not get burnt down. The sponginess of the bark is a fire retardent method. Leaves that are spongy contain more water, the more water, the less flammable. Having a spongy bark traps water, and makes the bark very unlikely to catch fire.

Forest fires probably cause the rich moist soil in the first place and seedlings are really picky about where they grow, so when forest fires come and burn all the other plants down, the plants break down into nitrogen molecules, and this fertilizes the soil! Therefore the soil they grow in is rich and moist.

Hope this helps, and bear in mind, most of this is just application of scientific knowledge on my part, and simplified.
Two sites that gave me ideas
http://www.redwoodworld.co.uk/redwood_types.htm
http://apps.kew.org/trees/?page_id=168

EDIT: Oh and this question would be better off in Biology. or botany