The physics problem regarding radiator arrays isn't unsolved, but it's not a problem that scales up gracefully. Small-scale radiators could get by via passive cooling, but large-scale radiators need active cooling, and now you need fluid, pipes, and pumps that all represent additional launch mass and points of failure (and the pumps are generating heat of their own, so now you need more radiators...).

I think it's not necessarily about being the cheapest option, but a more politically acceptable one. I don't think you're going to get people protesting a data center in space considering it won't be next to their house, won't use water, and won't lead to increased electricity rates. I could see companies paying a premium to keep the political heat associated with traditional data centers off their backs.