I think OP's "small hydroelectric plants" point is important, there. Imagine something more akin to the water wheels that powered industry of yore along rivers

I think OP's "small hydroelectric plants" point is important, there. Imagine something more akin to the water wheels that powered industry of yore along rivers prior to steam and then electric power, not valley-filling reservoirs behind huge hydroelectric dams. I believe the term is "run-of-the-river" hydroelectric. If there is sufficient continuous flow down the river, and a goodly elevation drop you can use to build head pressure, you can indeed tap a small canal off, pass the flow through some turbines, and feed it right back in to the river. I think it is a matter of scale, water flow, and NIMBY-ism. While such stations to generate power, individually its not a whole hell of a lot, and who wants their river-front view besmirched by penstocks and a concrete blockhouse of a turbine building?