That sounds cool, but people wouldn't want pyrotechnics blowing up their ships. For anti-submarine warfare, though, depth charges are the only realistically effective weapon, so maybe an exception should be made in the case of attacking a sub.

I had an idea for mare realistic non-pyrotechnic torpedoes though. What if you were to take one of those Airsoft gas-filled shotgun shells, and mount it in a gas-powered torpedo so that the firing pin would be pressed on impact... a blast of about 5-10 BBs would make a big hole and probably sink the ship in one or two hits. These torpedoes would be as wide as a 12 gauge shotgun shell though, a little thick for the scale they would probably be used at.