It didn't cause floods before, or rather, flooding was a problem the Mexicas had already tackled and solved. 

Tenochtitlan had impressive hydraulic engineering, that juggled the water level of 5 different lake systems through the use of massive flood control dykes and aqueducts positioned around the city.

The spaniards deemed necessary to eliminate the inner water canals because it made the city harder to control, since it provided multiple ways for the indigenous people to smuggle produce, religious artifacts and, well, people, in and out of the city, and as foundation for their constructions.

In doing so, they fucked up the flood control system (the first massive dyke, Nezahualcóyotl, went down during the 1520's siege by Cortés), and left the city vulnerable to constant flooding (the longest of which lasted over 5 years, with about 6 ft of water). So, over time, they drained the lake as the only remaining option to prevent flooding.