In the story the Once-ler builds a small shop and cuts down one tree at a time. The trees are a special kind of tree that don't grow anywhere else, and there's also a bunch of indigenous animals unique to the area. The Lorax speaks for the trees and the animals.
As the story goes along, his factory keeps getting bigger and bigger, and he starts building bigger and bigger machines to cut down trees faster and more at a time. The loss of trees makes one kind of animal leave, dumping pollution in the water hurts the fish, and the smog starts hurting the birds.
In the end he expands so much that he chops down the whole forest, displaces all the animals, and kills off all the special trees.
The theme of the book isn't that driving your car is a terrible thing or how every little thing is inherently bad, it's about how corporate greed has been hurting the environment and how people need to protect nature instead of recklessly and selfishly abusing it for their financial gain.
So basically, you are right.
The lorax flips out when he chops down one tree. To him there is no such thing as acceptable moderation in terms of using the enviroment to better our lives.
Of course Once-ler doesn't believe it either, and that's why things get the way they do.
It's a fact that places like Lake Eerie have been rendered toxic in the past because of pollution, there is no denying to that. But the story presents an all or nothing approach, and ignores industries (like logging ironically) which take great measures to restore the enviroments they use.