The absolute strongest complaint is that DCs consume treated, potable water, which is less abundant / easily re-created than any old non-potable source. (Of course the easy solution here is DCs just ingest / treat their own non-potable source. Or utilities charge rates sufficient to price in the externality of drawing down more potable water. The economics still work for DCs if they need to treat their own water -- the fundamental problem is that utilities are underpricing their potable water, so DCs prefer it all else being equal.)
Why don’t data centers use gray water more often? Wouldn’t that be better for basically everyone?
My guess is it’s some combination of the infrastructure not existing, the distribution being bad, and the treatment costs not penciling out.
But that feels like the kind of thing municipal utilities could solve with pricing. Potable water should probably be priced differently for residential use than for big commercial/industrial users, in a way that pushes them toward non-potable sources wherever possible.
A fun Texas water fact I always bring up: the entire state’s monthly freshwater use is roughly a week of freshwater inflow into the Chesapeake Bay. Texas would be the 8th-largest GDP in the world if it were a country, and its whole monthly freshwater demand is basically a few months of water that the Chesapeake just dumps into the ocean. (Of course, estuaries make use of the water so it's not just wasted but it's illustrative imo)
Another fun comparison point is yearly Texas uses 0.08% the volume of the Great Lakes in freshwater but ~ 30-50% of the volume of all the lakes in Texas.
We've got a lot of water but it's not distributed evenly and we should probably build some sort of water pipeline eventually so water rich states can sell to water poor states.
Again, this is all just speculation by someone who knows not a damn thing about municipal water management.