Electricity can be generated sustainably. Rare earth metals can be recycled. We are working on alternatives to fossil fuels. Environmental issues aren't a zero sum game. You don't "Lose" just because something else also pollutes. It's an issue that is worked on systematically. Could it be a lot faster? Yes of course. But we work with what we have.

Data centers are also multi-use. You don't build a data center just to house your game. You pay for the space in one that already exists. A company can choose to make software available on a platform that is open to a large portion of the world, or it can spend cash and resources shipping boxes of plastic all over the world. The pollution and waste generated by shipping something across an ocean massive. Do you really want to put all that into the air so you can have the plastic circle?