With well considered engineering it doesn't even need to be tap water. If you have a closed loop thermal conductor that interacts with the components themselves you can then use really trashy contaminated water that just needs to be clean enough not to actively erode the heat transfer mechanism. We have setups like this all the time that use condensed air via cooling towers or salt water immersed heat sinks to discharge energy - it's more expensive than tap water but it isn't technically complex. So if it ever becomes unpalatable (likely due to politics) to use tap water there are some readily available alternatives.
The big win of being in space is just a worse alternative to using an intermediary heat transfer medium.
It's the same reason we use single use plastics. No matter the politics the business decision is going to use the cheapest option available. I'm confident that all the hyperscalers could create datacenters that don't affect the local community basically in anyway. There's been data centers hidden in plain sight for decades. The demand drives it to the lowest common denominator
The big win of being in space is just a worse alternative to using an intermediary heat transfer medium.