Nameplate capacity (power, in MW) isn't the only consideration in electrical generation, but total generation (energy, in MWh), dispatchability, cold-start capability, pollution, other impacts, maintenance, storage, accident risk, waste storage, and other factors.
Even smaller hydro sites are valuable in that they represent very raapidly dispatchable load --- a dam's turbines can be put online or taken offline in seconds to minutes, where other sources (notably conventional and nuclear thermal power) require hours to days to make large cycling changes.
Solar and wind rely on incident available energy, and are not deployable at operator discretion, though balancing over the grid or via storage, or dispachable load, may be possible.
Hydro banks power in the form of impounded water. And with relatively simple moddifications offers 90%+ efficient pumped hydro storage capabilities.
The downsides are the large ecological impacts noted in the BBC article, sedimentation (a particularly large problem on the silt-heavy Colorado River), as well as some risk of structural failure, though the US record on this is generally quite good.
With many thousands of dams, there've been a handful of major failures. Planning, alerts, and response generally eliminate of minimise deaths, though disruption from evacuations, or property damage can still be substantial. Long-term consequences spanning centuries, as with nuclear failures, are not a factor, even in utterly catastrophic failures, largely experienced outside the US.
I'm not defending the Klamath hydro facilities, only noting factors.
Your obsevation that there are both benefits and negative impacts is true of any technology or technological intervention.