Iran was basically a throphy throne for Turkic strongmen to roleplay Persian King of kings for most of its post-Islam history. I assume the collapse of a strong nation state post mongols destroyed any hope of a top level national reconstruction effort. Water was sourced from north and flowed down south. It's like saying there we still have coal when someone has come and ripped up the entire railway network. More aptly, think Christmas lights in series. Now imagine the lights are little oasis towns, and far flung. Water stops flowing one day and it never comes back. That's likely what happened. (Also remember that Iran is ~1/3 the size of US and the dry parts are in the interior.)
