Thought about this one a bit more since i use SM3 but havent had to mess with it for a while. If you want to completely get rid of it, try the following.
Restore your original ShadersHLSL subfolder in the root of FSX
Restore your original WaterConstants.Xml in the root of FSX
Remove ALLOW_SHADER_30=1 from FSX.CFG
Delete all shader subfolders in Appdata \ Local \ Microsoft \ FSX
Restart sim and report back.