How it works

A deity that judges and is associated with water as Varuna doesn't sound very attractive and compelling to worship, which is why Indra "replaced" him. In a patriarchal society, who cares about being judged or judging oneself, and worshiping a watery, effeminate deity? Better adopt one that that fosters conquest and victory like Indra, who gets drunk with soma, just as men like to get drunk on wine, and who throws thunderbolts on his enemies, just as men like to have enemies for them to hate. Who cares about internal enemies? We're all like Indra, enemies are outside.

But the deities don't care about the way we portray them. The waters that Varuna causes to fall and his watery realm refers only to the  expanse of the metaphysical sky from which the intelligible forms fall and are aprehended by the mind or Indra. With his brother companion Mitra, or the Sun, or Chitta, Consciousness, one fills the other, and are like inseparable twins, until it falls on the west which was later assigned to Varuna, just like the genitals of Ouranos which fell in Okeanos or the river surrounding the Earth, only to rise again as the morning sun again unto Varuna. Thus Mitra becomes Agni, Varuna becomes the dispenser of Soma, Indra that which consumes it, which is why he separated Dyau and Prithvi, so he could become the next ruler who enjoys the heavenly power.

But like Krishna the lover and Arjuna the warrior, or the Atma behind the Jiva, the Supersoul behind the Soul, Varuna is relegated to the background of the bottom of the sea, and the Jiva assumes control of the creation. One becomes effeminate and the other masculine. How metaphors can become deceiving! But it's not even their fault either. We only see what we want to see, there's no question about it.