My child was a water refuser (and milk after 11 months!) and I had to choose between dehydration and tooth decay. She was hospitalised twice as a result of dehydration and we were then posted to a v hot country where her fluid intake had to double. The second time she was hospitalised (in Cyprus) I was roundly set upon by the doctor who gave me absolute hell for being a "stupid English" [sic] not understanding that dehydration could kill.
I chose tooth decay.
She didn't drink plain water until she was 6 years old. Last year at 9 years old she had three back teeth removed under GA (and one normal wobbly tooth taken at the same time). As horrible as it was that DD had to have a GA I am still quite content in my choice for her, and she bears me no ill will.
The first dentist that she saw last year was a complete and utter wanker to DD and to me. He scared her, was rough with her, told me off in front of her, told DD off for eating "too many sweets" (she doesn't) and despite my explanations decided that I was lying, deluded and an inadequate parent. He made DD cry and I very nearly punched him. Thankfully the very decent and sensible dental nurse that was with him calmed the situation, hustled us out of the room and referred us to someone who wasnt a complete wanker.
The dental surgeon was fabulous, listened to my explanations, talked to DD, kindly, about what was happening and why and never once gave her (or I) any grief.
The rest of DDs teeth are fine, very strong and very clean. She hasn't had any problems since and at her last dental check up (6 months after surgery), she was commended on her dental hygiene and lovely smile.
Some dentists get it wrong. Some parents make bad choices for good reasons. Some dentists shouldn't even be vets. Some are ace.
Maybe speak to another dentist OP, just to get a second opinion. I'm not saying the first dentist was wrong, but a second view can't hurt.