Remediation is always more expensive and less effective when treating across a diffuse area (which happens when moving the toxic sediment downstream) than in a single contained area.

As a civilization we're gradually getting better over time at remediation of large-scale "waste" like this, but still primitive considering our state of the art capabilities; we still don't recognize at a systemic, industrial design level that waste is materiel that we don't understand an economic use for yet, or understand how to transform into materiel we want at a thermodynamically desirable cost.

Do you want it 100 km away or in your garden and living room?

100 km away is another family's garden and living room.

They're living at the bottom of Lake Mead?

(cue the Yorkshiremen sketch https://www.youtube.com/watch?v=Xe1a1wHxTyo )

at least with it piled up behind the dam you could theoretically say its contained. Of course you could always end up with it down stream and out of control like Brazil recently faced when a dam for a mining company broke.

With the right equipment you could just suck up the sediment and then isolate it further. Having watched more than one youtube video of river restoration where they blow the dam from below that amount of gunk flying down stream can never be good

The toxic sediments are buried. If the water were to flow, the sediment would get kicked up.