webmatrix wordpress rewrite rule in plugin

I wrote some simple php code to add a watermark on images. This code is in file wp-content/plugins/Watermark/Watermark.php. Then I instructed Wordpress to use that code to handle requests for uploaded resources. This is done in web.config, using the following tag:

<rewrite>
    <rules>
        <rule name="MyRule" stopProcessing="true">
            <match url="^(.*)wp-content/uploads/(.*)$" ignoreCase="false" />
            <action type="Rewrite" url="{R:1}wp-content/plugins/Watermark/Watermark.php?src=wp-content/uploads/{R:2}" appendQueryString="false" />
        </rule>
    </rules>
</rewrite>

I would like to achieve the same behavior in a plugin, without having to affect the web.config file.

Therefore, I cleaned the web.config file and created this plugin file:

<?php

 /*
    Plugin Name: Watermark
    Plugin URI: 
    Description: Plugin to automatically add watermark on images
    Author: 
    Version: 1.0
    Author URI: 
    */

function watermark_plugin_activate() {
  watermark_plugin_rules();
  flush_rewrite_rules();
}

function watermark_plugin_deactivate() {
  flush_rewrite_rules();
}

function watermark_plugin_rules() {
  add_rewrite_rule('^wp-content/uploads/(.*)', 'wp-content/plugins/Watermark/Watermark.php?src=wp-content/uploads/$matches[1]', 'top');
}

//register activation function
register_activation_hook(__FILE__, 'watermark_plugin_activate');
//register deactivation function
register_deactivation_hook(__FILE__, 'watermark_plugin_deactivate');
//add rewrite rules in case another plugin flushes rules
add_action('init', 'watermark_plugin_rules'); 
?>

This looks quite straightforward, but does NOT work!

I activated it from the Wordpress dashboard. I noticed that the plugin does not add any 'rewrite_rules' in the 'wp_options' table of the database. I tried to save the Permalink Settings, but I had no luck.

I also tried to replace the calls like flush_rewrite_rules and add_rewrite_rule to method of a

global $wp_rewrite;

class, but, of course, nothing changed.

I also attempted to hook 'generate_rewrite_rules', but, again, I was still missing something.

I'm using Wordpress 4.1.1

Any suggestions?

Thanks!