> Datacenters do not need water. It is just slightly cheaper for them than cooling with electricity.

As long as electricity at least partially produced using fossil fuel I would prefer data-centers to use as little electricity as possible. There are regions which are getting plenty of rainfall on average (which can be collected and stored) or were getting some water from rivers will have negligible ecological impact.

But currently DC operators have little incentives to choose DC location based on outdoor temperature or water availability and there are plenty of DCs in hot and arid regions.