Not every watershed in Virginia has a large dam, but few besides the North Fork of the Shenandoah, the Powell, and the Blackwater rivers have low volumes of impounded water. There are only two natural lakes in Virginia:
Mill dams were constructed on most Virginia streams in the colonial era to power gristmills, gring limestone into plaster, and to saw wood. Today, nearly all Virginia lakes were made by humans damming streams to create swimming holes, farm ponds for watering cattle/horses, drinking water reservoirs, and flood control storage.
Impoundments were usually made for transportation, industrial, hydropower, or municipal drinking water purposes. In our climate, unlike the Western United States, impoundments for irrigation are scarce. Lake Moomaw was built to mitigate the pollution coming from the Westvaco paper mill at Covington, under the philosophy that "dilution is the solution to pollution."
In addition, several large reservoirs have been constructed for hydropower projects - including Lake Gaston, Smith Mountain Lake, and Claytor Lake. Lake Anna cools two nuclear reactors. (The two nuclear reactors in Surry County are cooled by water sucked directly from the James River.)
The public policy pendulum has swung from strong public support for building new dams towards a new support for dam removal. Small gristmill dams are mostly gone now, removed by floods. Other dams built in the 1800's as part of canal systems are, in most cases, just a small Class 1 or Class 2 rapid in a free-flowing stream today. However, there are still some large dams in cities such as Richmond and Fredericksburg. These create flat-water recreation opportunities, or at least interfere with white-water recreation (though Hollywood and Pipeline rapids in downtown Richmond are spicier because of old dams...)
Dams interfere with fish migration, and some still block it completely. Some large dams have been removed, such as Embrey Dam in Fredericksburg, while fish ladders have been constructed on others. In the 1970's, the proposed Salem Church Dam on the Rappahannock was rejected. The proposed damming of Cohoke Creek to create King William Reservoir was the most recent large reservoir project to be blocked by economic/environmental concerns.