Kudos to the author(s) for building LiteFS, it really does seems like an interesting project. However, I can't see this being a popular pattern moving forward (or at least I hope that's not the case).
Replacing APIs with DBs in real production workloads? Really? I don't have much else to say. Also, the value proposition is not quite clear to me. Using replication to have local, read-only replicas of an SQLite db might admittedly be beneficial for high read-throughput workloads but I'd imagine that the DB might have serious size/read-throughput constraints due disk space and network overhead from replication.
My takeaways are: a) This doesn't sound like a reliabile pattern to build distributed services. b) It's bad PR for fly to publicly push for the adoption of this pattern. c) It's even worse PR that fly is using this internally.