Is the wrath of the goddess meant to turn all nearby enemies into barrels?
Yes! The in game reason is flimsy; she's a goddess of Dwarves, Digging and Drinking - so can turn her enemies in barrels of aged and volatile whiskey. The real reason is that it offers another risk/reward scenario - it can be used to clear a room full of enemies, but it leaves you trapped in a room with an angry goddess and lots of exploding barrels!