... print server and file server local, it was now 1/2 way across the country .... Large Datacenters have always been a stupid idea. distributing your services to locations around your offices is far more efficient and significantly lowers the connectivity needs

That's a very narrow view on this issue. Office type servers are only a small part of what goes into datacenters as a whole. The one's I'm familiar with are mostly filled with web sites/services that demand the tight controls and close-to-the-backbone connections that datacenters can only give. Datacenters are also used for huge data warehouses, massive computing, etc.

Your post does illuminate one point, although somewhat obliquely: datacenters allow a small number of people to take care of a ton of critical systems. The more spread out something is physically, the more overhead and pain is going to be involved in taking care of it.