A few points come to mind:
Presumably they also wanted a canal and there may well be an optimum point where you maximize some sort of combined utility
Jobs programs, even those that create nothing particularly useful, are about giving people a sense of worth and accomplishment, otherwise you could just hand out money. Obviously futile make-work activities like the one suggested achieve the opposite of that and are, indeed, often deliberately used to punish and humiliate people.
-- Lewis Carrol, “Alice’s Adventures in Wonderland”
Hard to believe that it hasn’t show up here before…