Squids taking damage while in water

Affects also version 1.4.5 and also game mode "Survival"

I found some ink sacs in lakes.

I think this may be a combination of suffocation in air and mobs saving poorly. The squid may be saved slightly off its true position and so is suffocating in the air.

I agree. Friendly Mobs' AI is poor. They don't avoid danger thing like lava, cactus.
Sometimes I see chickens going into lava, and villagers touching (and not leaving) cactus.
IMO, these are same problem.

I think a possible solution would be having a "drowning" time above water like players and mobs have under water.

The solution is for squid to never spawn at or near the surface of water, and to modify their AI so they never want to go there. Squid AI seems especially incomplete compared to other mobs.

(I also believe that squid spawn density/frequency is too high, but that's another issue.)

Confirming for 1.4.6. Large Shallow pools such as those found on plains large biomes seem to be a killing field for these poor creatures. But hey, free ink sacs with no effort for me.

Perhaps if squids were programmed to drown when not touching any water, instead of touching any air. that way, squids on the surface would still be touching water and would not die randomly

Still valid for 13w16a. Caleb F's solution might be the most efficient, since squids won't be able to jump out of water on their own anyway (and squidfarms where they need to drop out of water would still work) But just like the hostile mob AI was updated there might be an update for neutral/friendly mob AI sometime so they actively avoid dangers (except some other influence, like hunting/following the player has higher priority)

I started a new world with 13w16a and there was a huge school of squid in front of me. All were dying immediately.

I get this all the time, and my base is in the middle of the water

Still occurs in 14w08a. :\