Great, so you seem to agree the technology exists for this and it is a matter of deploying more of it?

It's a matter of deploying it for cheaper or with fewer downsides than what can be done on earth. Launching things to space is expensive even with reusable rockets, and a single server blade would need a lot of accompanying tech to power it, cool it, and connect to other satellites and earth.

Right now only upsides an expensive satellite acting as a server node would be physical security and avoiding various local environmental laws and effects

You need to understand more of basic physics and thermodynamics. Fighting thermodynamics is a losing race by every measure of what we understand of the physical world.