The problem with files is that they usually don't provide what users need or expect in 2024.
Having multiple users editing one file at the same time is hard, especially if they're non-technical and they don't understand git diffs. To make that work, you need CRDTs (or operational transforms), and those can't really be represented nicely in plain text formats.
Even something like a music library, where you have n devices authorized to make changes, each device keeps an offline copy, and all changes get "synced up" when devices get online, is just far, far easier to implement with a servr guarding over a database than with a raw file on some cloud drive.