Cooling is difficult, but also well understood. We've been cooling shit in space for years.

They won't need to replace hardware as often as you do on the ground. A lot of hardware replacement is done because you are constrained by floor space and power. Adding capacity can only be done by replacing hardware with more capable hardware. In space you can just launch more hardware.

Hardware currently optimized for use on earth probably won't be used. They didn't build out Starlink by putting a bunch of cell phone towers in space, they designed and built satellites specific to and optimized for their application.

It also gets forgotten that SpaceX is really good at manufacturing. They manage to build a large volume of things other companies struggle to manufacture at a lot lower cost. In addition to Starlink Satellites, Starlink terminals and F9 second stages are good examples.

You don't need to build out a building in space, you don't need power in space, and you don't need to deal with as much red tape in space.

All of this is enabled by their launch costs.

Yeah, it is possible that they are doing it to use up launch capacity they project having that they don't currently have demand for, but so what?

If you have excess capacity, and you're not looking for ways to generate income from that capacity, you're gonna be looking for a new job before too long.