The issue:
When squids swim around, they raise out of the water (1) and when they are near a block a the surface, they get stuck (2) out of water and die of suffocating (3).

This phenomenon happen often when you make a water themed town or server leaving ink sac on the ground. 

How to reproduce it:
This happen naturally, so you can create a pool with water high as the border and summon some squid and wait few minutes.