Server costs are manyfold. You're either renting expensive hardware or buying it outright (which you then need to amortize the cost for over several years), you're renting or constructing a specially configured space with lots of necessary infrastructure like power delivery, high-bandwidth networking, fire safety, dedicated cooling especially if your server farm is large enough, and you're paying for all the running costs on top of that, the network access, the power that you're using quite a lot of (and which isn't getting any cheaper lately), and the fees for all the personnel that service the hardware and the software.
The power-first approach that's been prevalent lately does factor into it too (as in what Mickmrly describes, the tendency to just pay more rather than work more now that the option is there), and is compounded by various other modern idiosyncrasies like the absurd layers of anticheat and DRM, data tracking and logging, and whatever else is running on top of that like AI training or whatnot that they're undoubtedly also using, which then also needs more power, and then it also degrades performance so more hardware power is used on predictive models and whatevertheheck to minimize latency in the face of all the other things that get in the way.
