Think off it this way. An acid contains a certain amount of bound up energy, which is what does the work. Just because you spread that energy out doesn't mean that energy doesn't still exist. You didn't destroy it or change it's state of existence. It means that energy just has to travel a greater distance to get to its job site. so yes it will work but it will just take longer. The more you dilute it the greater the distance. Distance = time. If you want the reaction to go faster then you have to speed up the ions so they reach their destination quicker. How can you do that? Heat!