Corrected entry: Water counted as something that would give a reflection good enough to let the person in the mirrors come, but the person could not use other things, for example people's eyes or clean knives, when they gave better reflections than water or very close to it. (This is a plot hole because it is never explained.)
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Correction: There are many plausible explanations for this, none of which MUST be presented in the film. The fact is we only see the demon use mirrors and water. It could be the medium has to be of a certain size. It could be the demon hasn't figured out how to use very tiny reflections. It isn't a plot hole just because it isn't explained on film.
The people on the other side CAN use small reflections, as Michael's reflection uses the reflection on the doorknob to open the door.