Why is there no upper-bound on power-efficiency of Hydro-turbines?

Betz' limit arises from the fact that if the turbine tries to take too much energy out of the flow, the wind will divert and go around the turbine instead of through it. With a hydrothermal system the water is typically behind a dam, so the water has nowhere else to go. The turbines effectively convert gravitational potential energy into work, which can be done (in principle) without any thermodynamic losses.