I probably wasn't clear. I don't doubt your first statement "The Top of the TOP500 machines are all liquid cooled." My skepticism is your second statement "due to physics constraints". It may very well be true but I'm just skeptical that it can't be done with a combination of engineering and ambient environment (mostly temperature but also a tradeoff between density and space). May be I focused on the word physics too much (being a physicist), but it seems the decision would basically be a cost-benefit analysis and risk management which involves many factors including money, maturity of solutions in the market, safety, etc. For example, at NERSC, there are real risk of a massive earthquake long overdue (the whole floor is quake-proof, but I guess the risk is reduced, not eliminated), so I guess they probably have considered this in that design choice.

But perhaps you're right that the physics is the ultimate factor here: what comes in must goes out. With order of magnitude scale of increase in power coming in, water seems to be the most effective and cheap entity to absorb those heat and be transported outside the floor very efficiently.