I doesn't matter that the power is intermittent. Thermal power plants exist because hydroelectric sources don't produce enough power to meet our needs. Well, it could be argued that we just waste too much, but that's another arguement!
Generally speaking, fuel-fired plants supply the "swings" in demand, but they are in service even when demand is at its lowest. So if you can produce more at the dam, even seasonally, you will burn less fuel in the thermo plants.
The limiting factor for a hydro station is not the size or number of turbines, but the flow of water into the reservoir. I believe that reservoir levels are allowed to fluctuate in order to make the best use of the average flow. If there is an overabundance of water in the wet season, I still don't see an advantage in using the extra generating capacity for electrolysis. In all likelihood, most reservoirs are probably being used to capacity anyway.
Disclaimer: I do not work in hydroelectric generation, so my opinion is that and nothing more.