Current environmental movement is downstream from that period - a reaction to abuses that happened. At least where the political situation tolerated its emergence.
Note that the Aral Sea, which lies geographically nearby, dried up for nearly the same reasons - too much water consumed - even though the Soviet Union was not in a position where they "couldn't have done much different"; they had plenty of productive soil elsewhere, being literally the largest country in the world and having been blessed with a lot of chernozem.
The underlying factor was the technocratic Zeitgeist which commanded people to "move fast and break (old fashioned) things". Such as qanats in Iran or old field systems in Central Europe.
https://harpers.org/archive/2013/07/the-tragedy-of-1953/
It should be noted that while the Shah obviously benefited from the coup, he remained suspicious of the Western powers who had supported it; he was not foolish enough to believe they were honest allies. Consequently, he was inclined to support attempts at autarky.
1: https://www.mohammadmossadegh.com/news/new-york-times/march-...
Dams are highly ineffective when the goal is water conservation. Censorship and punishment are also highly ineffective methods for water conservation.
I'm not so sure they could have done much different.