Why use Postgres if all you need is sqlite? Postgres is way overkill for a simple app with few users and no advanced database functionality.
For a cloud service, I think it comes down to whether you’ll ever want more than one app server.
If you’re building something as a hobby project and you know it will always fit on one server, sqlite is perfect.
If it’s meant to be a startup and grow quickly, you don’t want to have to change your database to horizontally scale.
Deploying without downtime is also much easier with multiple servers. So again, it depends whether you’re doing something serious enough that you can’t tolerate dropping any requests during deploys.