The cool thing about using SQLite as a basis for sync is that it leverages all that we know re: RDBMS merging, syncing and conflict resolution at scale. And, from a skills perspective, leverages our team's existing knowledge in SQL.
We have use cases where mobile devices may be offline for minutes at a time (in hotels and conference halls where wireless is either sketchy or un-usably slow). I can definitely see us using this. I may check out the Couch thing as well, although we use Cassandra for NoSQL scenarios.
So many apps, HTML5 or native, could benefit from an offline sync story. That wheel doesn't need to be re-invented over and over again.
This reminds me a lot of WebSQL, which I've always been sad was killed.