Data centers generate export revenue. For a country that has struggled to export as much as it imports, that seems very valuable to its national economic health, and sabotaging one of the few major export industries, and one that's growing rapidly at that, seems counterproductive.
Data centers also generate local tax revenue. In fact, across industries, they have the best tax revenue to tax resource burden ratio, using very little government services while paying significant property tax.
And the environmental damage, whatever that is, is negligible relative to other industries. Their only output is some noise pollution nearby and whatever emissions are produced in the power plants that give them electricity. All industries require electricity in proportion to how much economic value they produce. So unless you want degrowth and no industry, you're going to have energy consumption.
In fact, rising energy consumption is a sign of a growing economy. That's why China has seen its energy consumption grow far faster than any other major economy while its economy has also grown far faster.
They do use water but their water usage is mininscule compared to agribusiness, or even fast food restaurants and golf courses. And the potable water usage can be brought down. They just use the water for cooling. So they could use treated wastewater or recycle the water they use. Newer data centers use these more water efficient cooling systems. So water usage is not a major long-term concern. Not one that justifies crippling this key emerging industry.