As OP has already established, there's a phrasal verb to water down (literally and figuratively, to dilute). But that's not relevant to the cited usage here, where it simply means to [make] wet. Per my comment, this is clear from the context, which explicitly says that the roads were dampened to reduce the dust.
OP is correct in supposing that down in this instance simply refers to the fact that the water is splashed down[wards] onto the road. But I think it's fair to say the semantic content of the word is negligible here, since the meaning should be just as clear even if it's omitted.
Taking a different verb, it can be seen that [optional] prepositions are often added after common verbs of action where the [minimal] semantic content of the preposition can be largely ignored...
He ate his tea in a hurry, brushed up his jacket, and started off.
The man lifted himself off of the ground, brushed off his jacket and walked away.
He stood before the mirror while his valet brushed out his jacket.
In those examples, native speakers would be unlikely to register any difference in meaning if those prepositions were transposed - or more importantly, if they were omitted altogether.
In my examples, to brush up can sometimes be a "phrasal verb" (to review; refresh one's memory) - but that clearly doesn't fit the context, so it can be discounted.
My advice in such contexts is to consider the possibility of a phrasal verb usage, but if that doesn't quickly suggest a credible interpretation, assume the preposition isn't particularly significant. Often it'll be an almost random choice (but don't add such prepositions yourself unless you're familiar with the usage).
The term scared straight worked its way into the American vernacular after a landmark 1978 documentary by the same name. This documentary featured hardened criminals in prison talking with (and often shouting at) teens who were headed down the wrong tracks. The idea was, if some of these straying teens could get a glimpse at what might await them if they didn't get their act together, perhaps they could be "scared straight", that is, maybe this shocking dose of reality could prompt them into making better early-life decisions.
In the article, the author isn't talking about youth headed toward a life of crime, but how customers regard and treat the wait staff at a fine dining establishment. Those who have never "seen the inside" (a phrase that would refer to a serving time in a penitentiary in the original documentary, but, in the Salon piece, the phrase would refer to working at a restaurant) are more apt to treat wait staff with rudeness and condescension. So, the author is saying that everyone should have to wait tables at some time, as it would "scare them straight" – that is, it would dissuade them from lingering in the dining room long past closing time, or stealing a restaurant's centerpiece for a souvenir. I think the "scared straight" reference sets up this sentence in the following paragraph:
A required year on the front lines would not just be a refresher in simple good manners, but the reminder of the underlying purpose of those manners.
In other words, if you learn what it's like to have those things happen to you while you are "doing time" on the restaurant staff, your restaurant behavior will likely be straightened out for the rest of your life.
Best Answer
I've never translated that phrase before. I usually took it figuratively, like the tearing-down of buildings.
When the phrase is used with people, I understand the phrase as the tearing-down of someone's feeling. I believe that a definition in The Free Dictionary: to damage or reduce the importance of someone or something, could apply to someone's feeling rather well.