That's what Google was afraid of: the alternative is to decide that the cost of the model isn't worth the effort (externalities < benefit) and to abandon it. Which might be the correct decision, but one that loses Google a lot of potential money.
Really the claim is toxic academia style knife fighting for tenure at best.
"You use too much electricity" is tantamount to "tech is a flawed business model". Arguably solvable with increased green energy sources but that's more a job for society in general than just tech companies.
Moore's law isn't the only way to gain efficiency, and even if the available compute goes up, doesn't mean the total power usage will go down
There are other examples against the meme of AI using "a lot of electricity", for example a recent paper from Google where they show that a learned computational fluid dynamics technique uses only 2% the energy of standard techniques.
BTW, I ran a large scale computing platform at Google for several years. It made absolutely enormous, stunningly huge amounts of CPU available to scientists and we used it to make several important breakthroughs. However, after a few years, I finally was shown what the power cost implications were, and I shut down the project because the costs were not justified by the scientific benefits. Compared to what I was doing, ML is relatively skimpy on CPU.
I believe we reported that Exacycle provided 700K high speed Xeon cores for over a year, and the actual number is far higher (I can't share it because you'd be able to make a reasonable estimate on how many computers Google has).
You gotta pay if you wanna play. Humans are the result of a much longer and more expensive evolutionary process. It's only normal to have to pay a little to do the same for AI.