Because any random machine in the same datacenter and network segment might be compromised and do stuff like running ARP spoofing attacks. Cisco alone has had so many vendor-provided backdoors cropping up that I wouldn't trust anything in a data center with Cisco gear.
Ummm, no, The network is completely isolated. No one enters the cage and just plugs something into my switches/routers.
Any communication between the cage and the outside world is through the cross-connects.
Unless it's some state-adversary, no one taps us like this. This is not a shared hosting. No one runs serious workloads like this.
"Unserious"? Sure, everything is encrypted p2p.
Back in the 90s I discovered the CTO of a major telecoms company was packet sniffing EFnet traffic in one of their datacenters in order to log all the PRIVMSGs to extort a couple of people. Security is only as good as its weakest leak, and all that.