For low and slow cooks the wood mostly smolders rather than burns. When you get to high temp grilling (anyone remember the reason for the book title Fahrenheit 451?) soaking can extend the time it takes to heat the wood and keep the smolder going longer, but you'd be better off with a smoke pot to reduce the oxygen to the smoke wood. A nice side effect is after the cook you get a few more chunks of charcoal.
FWIW: Wood generally only smolders 120-150C (250-300F), but rotted wood can ignite at the high end of this scale. Most wood ignites between 190-260C (375-500F). Granted it's hotter in the pit than the dome, but remember we're also restricting the oxygen flow into the cooker to compensate.