Same reason why one might use SQLite over MySQL. Ease of configuration, no need to have a full blown DB server, lighter weight which makes it great for things like Raspberry Pi type hardware. For hackathons I've found it simpler to just use SQLite so I don't have to deal with MySQL configuration headaches that come up when IP addresses inevitably change.
Outside of NodeJS, I can see this being pretty handy for iOS development. I'm not a huge fan of taking JSON from an API, converting it into an NSDictionary, and then placing it into Core Data and RESTKit doesn't always fit my needs. I think this might work well for local persistence of API data for an offline mode.