One problem we've ran into with it, is tables with > 400 columns.
Personally I don't like it and I am luckily not in IT, but as an analyst I have seen many weird database structures. One can only imagine the business requirements that gave birth to some of them.
To quote a solutions architect to the head of marketing in a previous job: "You asked for a monster, you got a monster."
You can reach a point where it's not feasible to have everything done by joins.
EDIT: I mean in relational DBs in general. In this case, 400+ columns probably mean SQLite may not be the engine to use, regardless of schema :)