‘They also have not built any dams or reservoirs for decades.’
A huge part of the problem. Such things cause environmentalists to have fits though. How dare we alter the natural environment...
A narrow deep lake versus a broad shallow lake.
How much land is needed affects cost and you have to take somebody's land. The cost of the dam goes up. The longer the dam, the more ancient river beds there are which increases the risk of dam failure, which requires more soil testing, which isn't fullproof. The broad shallow lakes also silt up faster.
There are a number of these broad shallow lakes in west Texas which are presently bone dry. And Dallas is planning on building one.
OTOH, there is room for two more dams on the Colorado River but they would be in the Grand Canyon.