The Wood Elves do seem to have been experts in what one might call a level 1 D&D sleep spell, had not Galadriel somewhat complicated our analysis of 'magic' in ME. A couple of times Bilbo et al chased after the elven parties, only to 'magically' fall asleep.
The enchanted stream isn't a particularly 'evil' defence system, as long as it gets patrolled frequently. Assuming the sleeper doesn't fall in the water and drown, I guess the next elven patrol just picks them up and then either despatches, imprisons or revitalises them (perhaps with a little Dorwinion vintage). From Bombur's experience I guess the sleeper would wake up before they starved to death or whatever.
I agree its more likely to be the elves' doing than the Necromancer's. IIRC MERP has it that the stream is enchanted by some noxious emanation from a secret Sauronic hideout in the Mountains of Mirkwood, but as Scapegoat says, this doesn't tie in at all with Bombur's pleasant dreams.
OH and maybe the sleep effect wears off when the water is removed fom the stream? Otherwise Thranduil would have a very nice little earner flogging sleep potions to all and sundry!
As to bottling the water and using selling it on at an outrageous profit as sleep potion, well I guess maybe it doesn't work that way. Perhaps the effect 'goes off' when the water is removed from the river?
Remember they had left a boat. This could be a neat mechanism of only allowing 'goodly' folk across if it was only get-able by pulling on elven rope, because the evil types might be unable to touch the rope (from Gollum's reaction). Though it was old and rotten, so either the elves didn't expect any friendly travellers, or they had forgotten about it, what with their hectic partying schedule.
