Type providers are very powerful but involve running arbitrary external software at compile-time (e.g. a SQL Server or Postgres database). This can be difficult to set up and configure reliably in a multi-person project.
As for type providers in general, I don't think databases are the best example of their typical use case. Most type providers don’t interact with external systems; they usually parse schemas, configuration files, or other structured data to generate strongly typed representations. The database-backed approach is just one variant, not the norm.