I don't think the notion should be completely dismissed.
Looking at a map of Egypt, considering the distance from Aswan to Cairo I'm revising my earlier thoughts. It's about 1000km from Aswan to Cairo for example and I cannot imagine the flood having enough strength to travel that far with enough force to render the centre of Egyptian government incapable of some action
Cairo probably wouldn't even be damaged by a flood from the Aswan Dam destruction. The biggest problem the lower half of Egypt would face would be the lack of electrical power from the Aswan Dam hydro-electric generators.
I think there would be enough of an Egyptian government left to at least make threats about attacking anyone "stealing their water". Ethiopia would disregard the Egyptians and use whatever water from the Nile they needed. Sudan would probably start doing the same and sooner or later all the nations that border the Nile would do so.
The surviving Egyptian government might use this as a means to unite the people into rebuilding the country. What better motivation could they have "Our water is being stolen by the savages to the south, the lifeblood of Egypt is being sucked away by these leeches"
An attack on Kenya, as mentioned earlier, is highly unlikely to succeed but the Egyptians might be content with giving guns and food to Sudanese rebels to harass the Kenyan border thus placing greater strain on the Kenyan government, causing pressure to give into the Egyptians demands.
Protecting the border would be siphoning Kenyan troops away from other areas where they are needed because there's also the consideration that every nation around there is going to look at Kenya with envious eyes because it's still stable and has some ability to produce food and fuel whereas they have likely fallen into disarray and resorted to banditry and piracy to make a living.
Hence the need of an allied force to bolster the Kenyans.
P.S. and the Egyptians have some oil of their own (995,000 barrels/day in 1995 with reserves estimated at nearly 4 billion barrels) along with mining coal and gas from the Sinai, enough for them to be exporting it to nearby countries
http://www.scribd.com/doc/17771283/E...ectricity-Coal