That's true in theory, but I do find that they end up competing in practice when you're looking for something in between the two extremes.
I often seem to find myself in a position where I need a database, but it's only for one day's data, which is not huge but not tiny (say 100's of MB). It may be helpful to have a couple of processes accessing it, but probably only one will be a writer, and it's very likely (but not certain) that those processes will be on the same computer. It useful to have that data in a single file for archiving. Those are situations where you currently face a geniune choice between PostgreSQL and SQLite - more because both of them are a bit wrong, rather than because they're both perfect for it.
I wish there was something in the middle: a separate program you could spin up, so it's a client-server database like PostgreSQL, but it's just a single binary that doesn't need installing. And then it operates on a single file that it creates on the fly (or can open an existing one of course), a lot like SQLite. Hmm, as I think about it, it actually wouldn't be hard to make program that does that by making a thin wrapper around SQLite with e.g. gRPC.