I tend to use more wood than a lot of folks, but I wouldn't use more than 4-5 oz. for such a small chunk of meat.
That you know what it looked like at 4 hours tells me you opened the door at least once... how many times did you open it? With these smokers you not only CAN set it and forget it, you really NEED to set it and forget it. Every time you open the door you let out smoke, heat, and moisture and compromise one of the strongest features of these smokers. Don't spritz, don't mop, don't wrap... just leave it alone.

Also... if you're measuring the chamber temperature, don't. There is exactly zero need to do so and it'll only distract and tempt you.
What was the internal temp of the brisket when you took it out and how long was it in for total? I wouldn't expect that chunk to take more than about 1.5 hours per pound which means it should be done in ~6 hours. Keep in mind that time and internal temperature are strictly there to help you known when to even think about opening the door again. When its done a probe should run through it like butter and it should be nice and jiggly like a bowl of jello. I wouldn't even think about checking it until it hit an internal temp of 195.
Was it a piece of the flat or a piece of the point? How was it trimmed? Did you brine? Which shelf did you put it on? Was it fat cap up or down? Try to keep a good 1/4" or slightly thicker fat cap and put it cap down as high in the smoker as you can go. Points are more forgiving than flats, but you should be able to do both with ease. I always wet brine. I've also always done much larger full packer briskets of 12-18 pounds.
You can absolutely stick a water source in the smoker. Put it in something metal and sit on the floor of the smoker right next to the fire box. Brisket is pretty much the only thing I do this with.
I would be very surprised if the parts that go into Masterbuilt smokers are made in the U.S. I would also be surprised if very many people know the owner of Masterbuilt by their first name. I'd be even more surprised if it's the owner of Masterbuilt who answers the phone and emails when customers have problems. Yeah, Steve has the Smokin-It's built overseas, but that's really kind of the way things work in a global economy. Steve takes excellent care of his customers. If a part should fail on your #2, which has a 3 year warranty, Steve will have a replacement out to you in no time. It may not be fabricated here, but you're truly supporting a small, U.S. business when you buy a Smokin-It.
Unlike a lot of (most of?) the Masterbuilt smokers there is no glass to break, seals to wear out, and the smoker isn't going to rust. You can also use the Smokin-It in pretty much any climate and weather without modifying it. The Smokin-It is superior to the Masterbuilt in pretty much every possible way.
Hang in there... another thing that you might not have gotten with an MES is this community. We treat each other like family here and will gladly help you figure out what's going wrong when it does go wrong. Since we're family now, can we call you by name?