This reeks of the infamous dropbox comment on HN. Let alone the fact that the average user has no idea what SFTP is nor has any easy way to use it, even as a tech literate used who has no difficulty setting up the solution you describe, I would not switch from a more dedicated solution, because quite frankly it sucks. You have to manually sync, the sync cannot deal with two different systems adding different accounts, you now have two systems to deal with (sftp and keepass), and you're not significantly more secure. I would go back to reusing passwords before I adopted such a solution.

> Why can't people use keepass in local environment

How do I use it on my phone then?

> or store the database in sftp

SFTP where? The "cloud"?

> Why do people try so hard to use "cloud" based clearly unsecure solutions?

Because it is the easiest and most convenient and most useful.