Did you mean MPC by any chance? (which MHE is often used in tandem with)
If so, MPC is indeed a superior algorithm, but it also requires a dynamic model (LTI, or state space). Such a model may or may not be easy to identify -- it would require the characterization of the dynamics of data center operations.
PID on the other hand, while less optimal, is "model-free" (technically it has a model, i.e. its tunings can be thought to derive from IMC or direct synthesis, even though in practice hand tuning is common) in that it can respond to a wide variety of circumstances without knowing much a priori about the underlying dynamics. PID tunings are also amenable to optimization (products like Loop Pro are used in industry)
Due to their simplicity, PIDs are capable of operating at much higher frequencies than more complex algorithms like MPC. PIDs operate in the order of miliseconds or faster, while MPC operates in the order of seconds to minutes because it has to solve an optimization problem at every iteration, which is too slow for fast loops. In the hierarchy of control, there's supervisory layers on top (RTOs), then MPCs then PIDs. It's usually not either-or, but all together, working at different layers.
Even in industries where MPC is dominant, PID control is still ubiquitous and used alongside it, especially for local regulatory control loops. I don't have enough insight into data center ops to know if PID control is good enough but in my experience PID can be good enough for many applications -- most control loops in the world are essentially still PID. Not because more advanced algorithms don't exist, but because PID has the advantage of being just good enough for most purposes. (cost is also an issue: PIDs are cheap, while licensing costs for industrial MPC software range from 10s to 100k$)