Fluid instillation would not cause damage to the prostate, unless it is too hot. The use of very large nozzles, tips, dildos, plugs and the like could if misdirected cause trauma to any of the intra-rectal and anal tissues. Yes, pain is an important messenger of impeding injury. Bleeding can come from any number of issues like from simply hemorrhoids, but also from overzealous probing and stretching of these delicate internal tissues.
Other than injury from too hot liquid, continuous instillation of enemas does have three essntial problems, one being overdoing the absorbyion of some of the water through the colonic lining into the bodiy via the bloodstream which causes excess flow of urine such that valuable electrolytes are removed from the body which could cause serious sequelae like cardiac arrhythmias. In addition, acid/base relationships, ie. pH of the body fluids and blood can also be negatively affected. The excessive washing out of colonic bacteria (which are beneficial to colon health) can cause super infections(both bacterial overgrowth of non desireable pathogens) as well as fungus infections.
Your question was related specifically to prostate involvement. The wall between the rectum and the prostate is quite thin (that is why the doctor can do a digital exam of the prostate through the rectum). It is this close relationship that permits infections and trauma in the rectum to influence the prostate, causing a prostate inflammation or infection. Changes in body fluid chemistry, volume, pH, electrolyte concentration is believed to be a concern in the chemistry of the semen produced (in the prostate) and ejaculated, thus negatively affecting sperm concentration and even viability.
Remember, anything taken to excess can be harmful.