> The problem is that this tends to make the power plants less efficient at electricity generation.

Huh what? Never heard of that one before.

> absent any legal requirements, the involved parties have all the right incentives already

Well... that's the problem, they don't. Sure, datacenter operators could go and offer to install district heating, waste heat recyclers and whatnot, and it would likely be profitable. But, and here it gets annoying, it's not profitable enough.