Like much new technology, it evades regulations. Hyperscalers are getting crushed by popular backlash and resource constraints. And like typically nerds they'd rather dream up a massively overengineered solution rather than face their responsibility as human beings.
No noise pollution or actual pollution from gas turbines. No using water in the desert. No angry communities.
None of these are problems if you put data centers far away from population. No one does that right now because it's a lot more expensive to set up and maintain, because you have to set up all the infrastructure from scratch. You know what's 10000x more expensive than that? Setting up the infrastructure in space.
Facebook put a data center up in Luleå, Sweden, which is in the north, far from cities, so it's not unheard of.
Their datacenter at Datavägen 15 is about 100 meters/yards away from residential buildings, not a great example.