Praise be to Allah.
This question was answered for us by Shaykh ‘Abd-Allaah ibn Munayyi’, who said:
“One of the basic principles of sharee’ah is the hadeeth of the Messenger (peace and blessings of Allaah be upon him), who said: ‘There should be neither harming nor reciprocating harm.’ Part of this principle is that the Muslim is not permitted to harm himself, which includes not using contaminated water for doing wudoo’.
So it is forbidden to do wudoo’ using contaminated water, but if a person does do wudoo’ using such water his wudoo’ is still valid, because it is not naajis (ritually impure), but his action is haraam because he is harming himself. And Allaah knows best.”