* Metadata: read/write tags as file metadata (depending on the file format) most common formats like document, image, audio, video have metadata support. http://en.wikipedia.org/wiki/Metadata
* Sidecar file: http://en.wikipedia.org/wiki/Sidecar_file and http://en.wikipedia.org/wiki/Extensible_Metadata_Platform and the Apple Spoghtlight files http://apple.stackexchange.com/questions/6707/how-to-stop-os...
* Alternative file streams: http://en.wikipedia.org/wiki/Fork_(file_system) and http://en.wikipedia.org/wiki/Extended_file_attributes
(first option is preferred)
So, yeah, show stopper. Also, what's so bad about a database? Yes, the file system is very good at keeping track of files, but there are databases that largely don't get in the way, like sqlite, cdb, etc. They will sync across servers reasonably well with things like dropbox, as long as you don't have lots of people trying to concurrently do stuff from multiple places. If that's what you're doing, this kind of tool isn't right for the job anyhow.
However their approach is awful. Imagine what will happen if you tag video/audio files.