As a country, we use 322 billion gallons of water per day. A few million gallons for a datacenter is nothing.
The water gets contaminated and heated, making it unsuitable for organisms to live in, or to be processed and used again.
In short, when you pump back that water to the river, you're both poisoning and cooking the river at the same time, destroying the ecosystem at the same time too.
Talk about multi-threaded destruction.
Pipes rust, you can't stop that. That rust seeps to the water. That's inevitable. Moreover, if moss or other stuff starts to take over your pipes, you may need to inject chemicals to your outer loop to clean them.
Inner loops already use biocides and other chemicals to keep them clean.
Look how nuclear power plants fight with organism contamination in their outer cooling loops where they circulate lake/river water.
Same thing.
The cost to humans living in affected areas was massive and high profile, but it’s very questionable if it was higher than that of an equivalent amount of coal-burning plants. Fortunately not a tradeoff we have to debate anymore, since there are renewables with much fewer downsides and externalities still.
Nuclear bombs (at least those being actually used) by design kill people, so I’m not sure what the externalities even are if the main utility is already to intentionally cause harm.
A mid-tier top-500 system (think about #250-#325) consumes about a 0.75MW of energy. AI data centers consume magnitudes more. To cool that behemoth you need to pump tons of water per minute in the inner loop.
Outer loop might be slower, but it's a lot of heated water at the end of the day.
To prevent water wastage, you can go closed loop (for both inner and outer loops), but you can't escape the heat you generate and pump to the atmosphere.
So, the environmental cost is overblown, as in Chernobyl or fallout from a nuclear bomb is overblown.
So, it's not.