Not at all. Peak shaving with approaches like this is fairly common with utilities. Lots of them will give huge rebates on smart meters in exchange for this.
The energy difference between ambient-temp-to-frozen and ambient-temp to steam is much larger. I would think that this affects scalability.
I live in a city center that uses chilled water for some use cases, but it certainly does not seem scalable enough to be an "easy technical remedy" to the issues of distribution being expensive.
