Litestream allows scale up application architectures whereas Postgres allows scale out architectures (by only scaling up the database portion instead of also scaling up application servers).

It's basically the same thing as monolith vs microservices but extending monolith to the data persistence layer. With horizontally scaling apps being the predominant architecture right now, I don't really see Litestream changing much.

If you're going to horizontally scale Litestream with a multiple writers you're going to end up introducing all the network and synchronization pieces Postgres architectures already have.