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Having a little experience with dam safety, it is my opinion that the old dam was built of earthfill, compacted with c.1919 machines and capability. The earthfill had rodent holes that allowed water to begin saturating into portions.
The More..
Uh...earthen dam with limited reinforcement at the top...water crested over the top of the dam and ate it away...anyone who's played with flowing water and damming it up would understand the principles involved...
Housing development planners always need to project that eventually there will be a rain (usually after a drought) that will take out an old dam or create too much flow for streams to handle. Desirable as some places may LOOK for development, a cold More..