And note, a hydro turbine is generally extracting much more potential energy than kinetic energy. And you can never extract all of the kinetic energy, otherwise your water won't be moving anymore and if it isn't moving, how is it getting through a turbine?
Anyway, the constraints here are rapidly diminishing returns vs rapidly increasing turbine size (and therefore cost). For example, since kinetic energy is a square function of velocity, cutting the velocity in half extracts for you 3/4 of the starting kinetic energy in a water stream. To keep the mass flow rate constant, the output has to have twice the cross sectional area as the input. If you halve the velocity again, you again double the size of your output again but only extract an additional 1/5 (about) of your starting energy. Double the size of the output a third time and you've extracted more than 98% of your available kinetic energy.