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.