What's more, the dam installation changed the local water table level, and residential wells drilled since the 1940's only had to go down so far. If the dam is removed, all these wells will dry up, and the state is beginning to make it difficult to drill new wells, and they certainly don't want to shell out to install plumbing to unincorporated communities which don't vote for the majority party anyway.
Another dam nearby held a massive amount of water for one of the bigger cities in the state. This is on the west coast, and if we get the Big One, it'll flood a populated area with hundreds of thousands of people. So they've had to draw down on the water levels and it's basically useless now, but deconstructing the dam would probably be a project requiring federal money, and since it's an earthen dam in a seismic zone there isn't really any retrofitting that you can do to fix it.
Basically, dams will give you some cheap electric and a water supply for a while but after 50-70 years they're a huge liability.
An example would be Lake Pillsbury in Northern California which the dam has not done hydroelectric for decades but the fight to prevent demolishing the dam has had plenty of local support.