Of course landmasses' can sink. What strikes me has highly unlikely, barring something cataclysmic which I've not ruled out, is "all" off them sinking. That would be akin to the entire planet shrinking big time. I'd think that phenomenon would heralded a lot of other issues in and of itself. Still, I'm not saying the writers can't cook up some half decent theory for what's happening. One theory I'd toss out is something like the planet being hit by a asteroid and having the planet tilt off axis comes to mind, since that could also explain some issues with the temperature (well if it's a issue but really, the ice caps should have reformed after that last ice age, land or no land above water) in general.
As for Waterworld, I saw it at a theater first-run. The theatrical version is not the extended cut many watched on TV growing up, which IMO is quite a bit better, but a shorter, harder to follow film. Still, my memories of the film are mixed. I didn't think it was a good film, though it did have a great look and it might have worked with better editing. Also, it was one of the last, if not the last, film I went to see in a theater with my mother (she was a fan of Kevin Costner) before she passed away. The best memory of the film I have is her turning to me during the scene where they were rowing the supertanker and asking me, in all seriousness, if the film was a comedy and then the two of us getting into a case of the giggles after I re-assured her that no, it was suppose to be a serious SF film (the scene had me thinking Monty Python's "Meaning of Life" so I knew exactly where she was coming from!
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