Databases are a miracle product. If you think of an application as a car, the database is the engine.
The idea that you have a platform that can do everything without the abstraction of a separate data storage/query platform, that exists too. I'd argue that FileMaker, Lisp, MUMPS, and a few others basically do this in different ways. I used to be a DBA at a company where the entire company ran on Informix 4GL code (which was sort of like the Informix version of PL/SQL) within the database. Also a similar approach.
But... they also have significant drawbacks. You're permamently married to that app/database stack. If any component of the system doesn't scale... you're fucked.
By chunking out the solutions to include databases, app tiers, etc, you gain complexity but lose a lot of risk. If you cannot afford Oracle anymore, you can invest in labor to move to Postgres. If you're hitting a limitation with MySQL, you can move to Oracle. If you wrote your app in PHP, it goes viral, and you cannot scale it, you can migrate to a Java Application Server layer.