First of all you misquoted the Bible. It actually says this: "And God made the firmament, and divided the waters which were under the firmament from the waters which were above the firmament: and it was so."
Well, if we're going to dispute translations then the Bible actually says "וַיַּעַשׂ אֱלֹהִים, אֶת-הָרָקִיעַ, וַיַּבְדֵּל בֵּין הַמַּיִם אֲשֶׁר מִתַּחַת לָרָקִיעַ, וּבֵין הַמַּיִם אֲשֶׁר מֵעַל לָרָקִיעַ; וַיְהִי-כֵן". The word translated in English as 'valut' or 'dome' or 'firmament' in the KJV (and translated as 'στερέωμα/stereoma' in Greek, from 'stereos' i.e. solid, and 'firmamentum' from 'firmus' in Latin) is רקיע 'raqia', which comes fom the root 'raqa', meaning "to beat out a metal sheet thinly". See Job 37:18 ("Can you, like him, spread out the skies, hard as a molten mirror?") and Ezekiel 1:22 ("Over the heads of the living creatures there was something like a dome (
רקיע), shining like crystal, spread out above their heads."). There's really no other way to read Genesis in context other than the structure is solid.
Genesis 1:20 says this: "And God said, Let the waters bring forth abundantly the moving creature that hath life, and fowl that may fly above the earth in the open firmament of heaven."
A more proper translation is something like "fly across the surface of the firmament". The word 'פְּנֵ֖י' is Hebrew for 'face', and is the same word used in Genesis 1:2 in the context of God hovering
over the water, not in it.
According to the Bible, the firmament is heaven, which is split into 3 parts: Earth's atmosphere, space, and the third heaven where God lives.
The cosmology of Genesis obviously differs from other parts of the Bible, as they were written centuries apart by different authors writing in different languages in completely different social and theological contexts. So "third heaven" is a reference to one of Paul's letters, but there he is speaking in context of the common Platonic view that there were multiple, perhaps 7 or more levels of heaven to get through before one's soul arrived at God. In contrast the writers of the early Old Testament believed that one went
down to the underworld Sheol after death, like a shade in Greek mythology.
Another interesting thing to note is how in Genesis the primordial waters exist
before God's creation. In ancient Near East mythology the waters of chaos are tamed by the creator god who slays a sea monster: see the Enuma Elish, where Marduk kills the serpent Tiamat and creates the firmament which separates the waters from her body. It might even be that Genesis is referencing this story as a demythologised critique of Babylonian creation myth ("Yahweh is so powerful he doesn't need to battle any serpent to create the world" kind of thing). Of course there are also oblique references in other parts of the Bible to Yahweh's slaying of the sea monster Leviathan (Psalm 74), so this is a common theme of water/chaos tamed.
The waters between the atmosphere and space fell during the flood as rain, while most of the floodwater came from the water below the earth's crust.
Yet in Psalm 148:4 these waters still exist: "Praise him, you highest heavens, and you
waters above the heavens!". The post-Flood Psalmist's cosmic geography still includes the primordial waters above the heavens as separated by the firmament. And of course, without a solid structure to keep the above waters out, what physical force was preventing the water from flooding the earth at the instant of creation? And why didn't the water freeze solid in space?
Anyway, with reference to the Flood, something else we can look at is Genesis 7:11 ("on that day all the fountains of the great deep burst forth, and the
windows of the heavens were opened.") where the "windows of the heavens" are literal windows in the solid vault in the sky which God opens to bring water down through.