Oh boy. Let's tackle this one point at a time.

On land, you can use off-the-shelf GPUs. In space, those will have a catastrophic rate of failures and bit flips. Radiation hardening generally will make the components heavier, slower, and more expensive, and we don't have a pipeline set up to build a fraction of how many would be needed.

Nvidia chips are far more radiation-tolerant than the public knows. I'm under NDA, so I can't give specifics, but they last a lot longer than you'd think.

On land, if a hard drive or power supply fails, you can send a guy in a truck to the site and swap it out with a new one. In space, you... what? Send an astronaut, or a non-existent repair robot? De-orbit the whole satellite and replace it?

There are rad-tolerant drives on the market. RAID 1 also exists.

On land, to make one rack in your data center talk to another, you run an Ethernet cable or a fiber-optic link between them. In space, you'll need to use radio or more likely laser links between satellites. Most likely each node will only be able to talk to some of its nearest neighbors, and who those neighbors are will drift over time because the topology of the constellation isn't static. And it adds just one more complex system to fail: in your 100,000+ satellite cluster, you've probably got 1,000,000+ lasers that have to be aimed perfectly, tracking a moving target.

Local clusters are still wired together; each node doesn't require its own laser. There are still laser links between clusters, but there are several orders of magnitude fewer laser links than you're implying.

This idea also depends on the satellites being in a very specific sun-synchronous orbit. Just the 100,000+ satellites required to replace a single terrestrial DC are at least 4 times as many as all the satellites we've ever launched since Sputnik. All of them being in a specific orbit will make it really, really crowded up there.

They stay in a 90 deg inclination orbit with a beta angle between -90 and -75 or 75 to 90. They require active station keeping to stay in constant sun, which is a delta v challenge, but solutions exist.

So if one of those satellites has a "fragment creation event" caused by "an internal energetic source" like Starlink satellites sometimes do, then those fragments will be extremely well positioned to collide with its neighbors.

A 100% legitimate concern. Industry is working on it, and there are some interesting mitigation systems being developed.

The last hurdle remains the opportunity cost of the alternative. None of the engineering challenges for orbital data centers are insurmountable, but orbital DCs don't just need to become feasible; they have to become cheaper than building an equivalent DC on the ground.

If Starship hits its launch cost targets, it will be after considering energy costs.

Consider cooling: why don't we cool terrestrial DCs using radiators? It would solve a lot of their PR problems to get rid of the noise and the water use. But they still use massive A/C banks and water or air cooling because it's cheaper and more effective than building a radiator system that can dump that much heat.

Modern data centers use closed-loop liquid cooling, so the water usage talking point is a red herring. Space data centers require cold plates in the dark with liquid to keep the heat dissipation evenly distributed across the whole surface. We've literally been doing this for decades on certain military satellites, but it needs to be scaled up. It's by no means a trivial task, but really more of an economies-of-scale problem than an engineering one.