You raise very valid points, and water usage (and over allocation) is a huge issue but it is worth mentioning that Arizona has fairly consistent and predictable weather, decently reliable power grids (with access to cleaner energy sources like solar, hydro, and nuclear), and is pretty seismically stable.
Don’t get me wrong, water consumption is going to be a huge issue once these plants really get going, but I don’t think it’s entirely stupid and nonsensical to park them where they did.
I’m not sure if it counts as underground (it’s been around for ages), but if you’ve never thought about how your shoelaces contribute to the overall fit and comfort of your shoe, I’d recommend giving Ian’s shoelace site a visit.