There's another way to look at it, though. If the data center satellites can be built and launched cheap enough, you can still come out ahead on performance/cost. I.e. if the space data center has 1/10 the performance of a ground one, and they can be built and launched for less than 10% of the cost, then you've got a business. And there are costs that won't be incurred - no electric bill, no cost for land, no charge for maintenance.

I wouldn't be too quick to dismiss Musk.

* no electric bill: if you use solar panels to provide your own power, you also have no electric bill on Earth.

* no cost for land: land in sunny places where crops don't grow (for instance) is good for solar power and very cheap compared to building out a datacenter

* no charge for maintenance: sorry, I really don't get this one. Why don't the computers in space need any maintenance?

Why do your magic space computers not require maintenance?