Yeah, never mind that it's a bad idea to have a mine under a lake, it's an even worse idea to authorize drilling for oil in the lake over the mine. I would love to read a report on how that came about. But apparently there's little hope to find that out: according to Wikipedia, "The Mine Safety and Health Administration released a report on the disaster in August 1981 which exhaustively documented the event but stopped short of identifying an official reason for the disaster."
Actually, salt mines are subject to collapse of the overlying rock, which can create sinkholes at the surface as the collapse propagates upwards. So putting them under lakes means you're not risking destroying someones home.
How do I know this? There's a major salt mine under Lansing, New York (just north of Ithaca) that's doing most of its expansion under Cayuga Lake for just this reason.
(Cargill has another mine under Lake Erie, and deliberately flooded a mine in Louisiana recently. They're trying to get out of the salt mining business, though.)
There's a freight spur line on the west side of Ithaca that is the sole remaining rail connection to the city. Its sole purpose these days is carrying salt from that mine (it used to also carry coal to a power plant up the side of the lake, but that plant was shut down.)
If you want to read of another fun fuck up, read about the time mankind set light to the coal seam under Centralia in 1962. It's predicted to burn for another 250 years.
One of the ways that was planned to mine undersea coal was in situ gasification: basically, start a Centralia-like fire, pump down oxygen and steam, and recover the mixture of carbon monoxide and hydrogen for use as a fuel. If it's undersea then the risk of uncontrolled introduction of air (as occurs at Centralia) is reduced.
The famous Hashima island (also called "Battleship island") in Japan near Nagasaki was an undersea coal mine - the network of tunnels even connected to another mining island nearby.
I don't think they ever had problems with flooding from the sea, but it was certainly dangerous enough to work there due to regular mining and industrial hazards. Also apparently it was very hot and humid in the mine.
The claim on Wikipedia seems to be they have not done so to the satisfaction of the other unesco members who had to vote for its inclusion as a heritage site.
This has also happened naturally all over in places around the world. There is one in Australia that allegedly will burn for longer than a million years.