Most data centres use some type of mechanical cooling (like AC) but instead of using compression, they can use a close system exchange with outdoor air. Still the same problem (several thousand households worth of heat in a single building), but it's at least not wasting clean water for it. They could use the heat to keep green houses warm, heat towns, or use it for power generation even.

But those all cost money, which is why they won't do it. This is the same type of planning that puts trains in a city above ground and builds multi million dollar buildings that will be torn down in 30 years because they are falling apart.