Because central government has a history of riding roughshod over the wishes of the local people. Not everyone is keen to see the place they call home or a place they enjoy holidaying in drowned under hundreds of metres of water.

Pretty much all the easily (both physically and politically) developed hydropower in Norway has already been at least partially developed.

Nonetheless there is a lot of potential for new and improved hydro stations and the work is ongoing.

Here are some figures about further expansion: https://www.nve.no/energi/energisystem/vannkraft/potensiell-...