This is one of the more ridiculous interpretations I've heard. I know it's not yours, Alabaster, I know you are just repeating something that may "explain" the "water and Spirit" verses in light of sola-fide, but, please think about it for just a minute. For this to make sense, Jesus would have to be actually saying that a person has to be born to saved. Isn't that redundant, considering He's talking to a person who was born? It's like saying, "you must be alive and breathing to be saved." In this interpretation the water amounts to nothing.
Nicodemus said to him, "How can a man be born when he is old? Can he enter a second time into his mother's womb and be born?"
Nicodemus obviously misunderstood Jesus. He didn't understand how a person could be re-born, so Jesus clarifies HOW TO BE REBORN, NOT BORN THE FIRST TIME:
Jesus answered, "Truly, truly, I say to you, unless one is born of water and the Spirit, he cannot enter the kingdom of God."
"Water and the Spirit" is how Jesus says we are born again (or "from above"). Nicodemus didn't ask how to be born "physically", he knew that. The context of the entire encounter is his misunderstanding of how a person is REBORN, and the answer is by "water and spirit".