People care about things like long-term support. Postgres 13, from 2020, is still officially supported. Litestream 0.1.0 was the first release, also from 2020, but I can't tell if it is supported still. Worrying about the maturity, stability, and support of an application database is very reasonable in risk adverse projects.
Besides the question wasnt litestream vs postgres backup apps. It was sqlite vs postgres.
More than once I've started a project with sqlite and then had to migrate to postgres. In my experience it's because of the way sqlite has to lock the whole database file while writing to it, blocking concurrent reads - this isn't a problem in postgres. (There's WAL mode, but it still serialises all writes, and requires periodic explicit checkpointing IME)
You may also find you really want a feature postgres has, for example more advanced data types (arrays, JSON), more advanced indices (GIN inverted index on array members), replication...