Said as someone who lives in a hydro power province. Hydro is incredible harmful. It ruins whole ecosystems in ways that an oil spill never could.
You're right that there's a real impact on ecosystems; flooding large areas and such. However, I'd describe it more as a disruption than a destruction; 30 years later the ecosystems around it have adapted and the reservoir serves the ecological function of a large lake. Sure, it's not perfect, but it's better than burning coal.
I can't vouch for this but I read stuff like this
https://news.wsu.edu/2016/09/28/reservoirs-play-substantial-...
td;dr: Bacteria in reservoirs decompose organic material trapped behind the dam releasing CO2 and methane.