Baked lighting looks almost as good as ray tracing because, for games that use baked lighting, devs intentionally avoid scenes where it would look bad.
Half the stuff in this trailer (the dynamically lit animated hands, the beautiful lighting on the moving enemies) would be impossible without ray tracing. Or at the least it would look way way worse:
Distributed computing would eliminate the water usage, since the heat output wouldn't be so highly concentrated, but it would probably somewhat increase power consumption.
In an ideal world I think data center waste heat would be captured for use in a district thermal grid / seasonal thermal energy store like the one in Vantaa.
Of course that isn't to say that we shouldn't be thinking about whether we're using software efficiently and for good reasons. Plenty of computations that take place in datacenters serve to make a company money but don't actually make anyone's lives better.