It is hard to spawn squids with Spawn Eggs because they cannot be placed on water like Lily Pads.
What I expected to happen:
Squid spawns in water when right clicking on water with a Squid Spawn Egg.
What happens instead:
Only spawns on blocks and when water is right clicked, nothing happens at all.
Environment
Java SE Runtime Environment (build 1.7.0_08-ea-b05), Mac OS X Lion 10.7.5
Confirmed. Unless you have a block to spawn the squid against (or some other workaround) it's not possible to spawn it in water as you would place a lily pad.