Before the dam they'd have around the same amount of water, actually slightly less than that, as the reservoir loses water through evaporation.

Dams don't create water that wasn't there before.

It sounds like they're upset that the dam wasn't oversized to handle flood control in addition to hydropower.

That's a legitimate gripe with public investment and shortsightedness, but the damn aren't going to be making it worse (unless they're managed by morons).