Indeed, even with "free" heat from CHP you can get an economic net loss.
Every house connected is a lot if piping, most of it unproductive — heating empty space, and losses in piping. So CHP district heating work best with large apartment buildings, and worst with single family housing.
This way Danish 65C° district heating for detached housing may be the worst example of district heating adoption.
And even if you do have only commie block style apartments, you may still end with having to add extra heat from local boilers in very cold climates. There regions in Russia where heating eats 1/3 of regional GDP.
But an overall, does district heating makes sense? Hell yes, and it must be made mandatory in the West one way, or another, along with policies to prevent counterproductive outcomes.