Air Conditioner problems of the 2008 Toyota Scion Xb

The 1st thing I noticed after starting my car after work was the heater was blowing cold air, even after 4 miles on the road (2 lane road - 40 mpg). About 4 miles further on (freeway - 60+ mph), I noticed a thin grey cloud behind me, but the evening mists were evident, so I wasn't sure at first if it was coming from my car. I checked the temperature gauge which showed flat cold - unusual! I checked my rearview mirror again, maybe 200 yds later, and there was a paler grey cloud following me. I checked the instrument panel again and there were no warning lights showing. About 200-500 yards farther, the vsc light came on, the traction control light came on and another light that is not shown in the owner's manual started blinking: the symbol was a car with a recycle arrow inside the body. I took it to mean that the controls were acknowledging the heater wasn't working (the symbol is the same as "air intake selector" on the heater/air conditioner controls). I felt that I still had good control over the steering; it was a clear evening and the road was dry, so I felt I could get home safely (2 miles). The car was running quite rough when I got home and there was what seemed to be steam coming from the front quadrant on the passenger side. The dealer says the water pump failed, causing the engine to overheat, so now the engine needs to be replaced ($6800). Why did the warning lights and temperature gauge not let me know the engine was overheating????? or why did the water pump suddenly fail?? no warning lights to indicate failure of a critical part!!!!!??!. (car has been regularly maintained, all recommended service performed by certified mechanics). No sign that the water pump was leaking prior to this incident.