They would have required significantly more funding and this was even before they got through all the permitting costs. There never would have been an over-supply as most of them could not even get through permitting much less all the approvals to start trenching up the roads or sharing existing pipes with other companies. Eventually over a long period of time individual data-centers and telcos worked through this but the initial idea of making a profitable business of running fiber in 2000/2001 was a pipe dream pun intended.

There was plenty of demand and plenty of data-centers popping up all over the place. I helped manage one around that time. It wasn't my primary role but we went from about 700 people to 6 in 6 years. A lot of businesses at that time were started by people with big hopes of getting rich and very little business experience.