The issue isn’t quite just that. If you are running your app and database on one single server and don’t need to move past that, SQLite is a great solution. But let’s say you have a web server and a worker server or more than one of each. Now you can’t access SQLite from multiple hosts as it doesn’t have a network access model. So your architecture is somewhat limited. You can still utilize it by either putting a network front end on it or setting up an API server in front of it that everything else uses. But at that point you have basically abstracted away SQLite enough that just using Postgres is easier. And with Postgres you get a lot more features that go hand in hand with multiple servers: replication, failover, etc.

I am a huge fan of SQLite but its best use case is a local database for a local application. You can use it for a client-server setup in some special circumstances but in my mind you’d need a compelling reason to do that rather than using the standard solution of something like Postgres.