pho3n1x hit the nail on the head. I was a personal witness to the same type of reaction in an art school metal casting class. A classmate of mine didn't properly dry his mold before the casting. Once the 1300+ degree liquid aluminum hit the tiny pool of water in the bottom the whole thing exploded. If the mold hadn't been 3/4 buried in a sand pit before hand we would have been in trouble

I'd suspect an even better reaction by suspending the thermite above a bucket of water, which would result in a quicker conversion to steam due to the lowered energy required and the greater surface area.