More things can go wrong with condensation in one giant system than thousands of less complex systems?
Yes a failure will affect a larger group of people, but it's also much less likely to occur, and much more likely to be fixed quickly.
As a thought experiment imagine everyone running their own privately owned diesel generator. Would that be more reliable than what we have now?
Cities have centralized steam systems for nearly 100 years, so there are probably different sets of challenges with central AC or folks would have figured it out? It might be something along the lines of the heat exchange system would be ridiculously large?