In desert biomes, squid do not spawn in water sources or streams. I am not totally sure if this is a bug or if it is intended, but I did not see mention of it in the recent patch notes. In previous versions of the game, squids were able to spawn in desert biomes. (Yes, I was at least 24 blocks away...)
EDIT : Nevermind... How do I delete a bug report?
Can't delete. You'll have to request this report to be marked as invalid.
The wiki says they can spawn in the desert. I'm not sure how that affects your bug though.