Seriously doubt that. The peshmerga have engaged ISIS before and generally kicked their butts. Don’t know enough about the tactical situation to tell, but sometimes when fighting amateurs you retreat - even give up a too-good to refuse prize - in order to get them to overextend.
By giving them that dam? They can kill half a million with it. Even if they are forced out again, they can blow the dam before leaving.
You make an excellent point.