Used to work developing standalone kiosks and things (think along the lines of stuff you'd find at a museum as the basic type of thing I'd work on), so absolutely not the use case you're thinking of.
In a number of cases, we were working with data that would really benefit from actual GIS tooling so PostGIS was kind of the natural thing to reach for. Many of these kiosks had slow, intermittent, or just straight up no internet connection available.
So we just deployed PostGIS directly on the kiosk hardware. Usually little embedded industrial machines with passive cooling working with something like a generation or two out-of-date Celeron, 8GB RAM, and a small SSD.
We'd load up shapefiles covering a bunch of features across over a quarter million square miles while simultaneously running Chromium in kiosk mode.
I know for a fact some of those had around 1k DAU. I mean, never more than one simultaneously but we did have them! I'm sure it would have handled more just fine if it weren't for the damn laws of physics limiting the number of people that can be physically accessing the hardware at the same time.
That said, we had the benefit of knowing that our user counts would never really increase and due to real-world limitations we'd never be working with a remote database because there was literally no internet available. In general I'd still say colocating your database is not an excuse to allow N+1 query patterns to slip in. They'll be fine for now and just come back to bite you in the ass when your app _does_ outgrow colocating the app/database.