Arakis was going to get terraformed, and just used like a regular new world. When they found the spice, that became the main draw, inctead of building a new world.
The Imperium had no idea/proof that the worms were tied to the spice . They didn't know that finishing the terraforming would kill the worms, and destroy the spice.
But they DID know that they found the spice out in the desert, so terraforming became potentially counterproductive. If your crop grows in the desert, keep the desert.
Arakis HAD enough water to be a normal world, it was just all in the wrong places, and there was no ecological landscape in place that would keep the water in the right spots. Which is why the Fremen were meticulously planting and cultivating greenery; if they got enough of that in the right places, releasing the water onto the surface would start a cycle of soil, growth, rain, etc. they just had to provide enough foot hold for the planet to establish a normal rhythm.
If I recall, the Fremen didn't even know that terraforming would destroy the worm and the spice. That's something that Paul susses out via his training and abilities, and the Kines even sort of suspected/knew, but kept close to his jacket.
