There are really only two uses for the logfile at this point from my view: a trigger for event driven independent apps like a windrop which find reading from a file simple and easy to do, and a record of chronological events for debugging. It isn't designed to be searched. It serves its intended purposes well though.
SQLite by the way is not designed to have a compact disk representation. There is no scenario in which it will ever be smaller than the logfile with the same data since it manipulates everything as plain text. Also, once you create indexes on it to increase search speed it becomes faster but now much larger on disk. Its transactional nature would benefit user/group files tremendously but all the overhead would only slow down simple recording of events to a logfile...
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