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I was hoping for an answer to this question.  I don't swim, but I don't see a real difference between this product and a short dress.  Is the fabric different?  Or are these not meant to be worn in the water? And if not, why not just wear a dress on the beach/at the pool?

These dresses (at least the ones I have gotten) are made of a special material that doesn't cling as much as normal material because it doesn't hold water like most normal clothes.  That is one of the main reasons that I prefer them.  They also come with leggings (I usually get the really long ones) and many of the dresses come several inches below the knee.  Between all of that they are the most modest swimsuits I have come across.
As for the comments of others...
True, swimming is not always necessary, but there will always be people who will swim and wouldn't you prefer for them to be dressed more  modestly?  
On my side...  My parents give horse camps and a few hours a day the kids spend swimming to cool off because of the heat.  I was the camp manager for 5 years and was also the life-guard in charge of the making sure the kids swam safely.  So, you could say, in a sense, my knowing how to swim was at times a matter or of life or death.  And well, I just prefered to have something more modest to wear for my job which had a professional and practical use to it.

I agree with Ladislaus - there's nothing inherently wrong with swimming.  The danger all comes from the circuмstances in which one swims.  I think it was Pope Pius IX who said that swimming with the opposite sex was an occasion of sin.  Hard to argue with him on this.  So the question is, can one minimize this occasion of sin or are there circuмstances where this doesn't apply?  Possibly.
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1.  If you're swimming with your family at a house pool  (modest swimwear is assumed).
2.  If you're swimming with family/friends at a house/private pool with adult supervision (modest swimwear is assumed).
3.  If you're swimming at a private/remote ocean, lake, pool  (modest swimwear is assumed).
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I would think that ANY swimming with the opposite sex for teenagers/adults would be strictly prohibited.  Allowing such is just a denial of human nature.  It could be allowed for children, maybe. 
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Modest swimmear = shirts/shorts for both men* and women**.
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*If a man wears a modest t-shirt and shorts in the pool, 99% of the time, they would not be an occasion of sin to others.
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**If a woman wears a modest t-shirt and shorts over top of a bathing suit (even a modern one), they'll be adequately covered for the situations of 1-3 above.
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The problem women have is that God created them to want to make a "fashion statement" with every clothing situation.  It's not possible to be fashionable while swimming.  If you want to swim, you can be fashionable/immodest or frumpy/modest.  We're not fish; swimming is a luxury.

I think trad women need to mature beyond adolescent recreations, and finally realize swimming isn't important.

Good grief, the big deal some women make about being on the beach or at the pool boggles the mind.

You would think Francis could almost write his next encyclical on the theology of the beach.

Get over it, already.

Swimming is for babies and the navy.

I agree with you.