The Census Bureau has made their data available for download for a looong time, both over the Web (including a bunch of different interfaces for slicing out just the data you want -- see http://www.census.gov/main/www/access.html) and FTP (http://www2.census.gov/) All the stuff that's available via the Web service is already available via download, along with a lot more. They don't provide it in SQLite format AFAIK, but they do offer a range of other formats that should be easy to get into SQLite if you wish.
If there's any problem with their downloadable data offerings, it's that they have so many of them that it can be difficult to figure out exactly which one has the data you're looking for.
this data is already available as a downloadable file. Check out ftp://ftp.census.gov/
It's CSV, and it's kinda ugly-looking, but it's available.
The 'full' data set is ...rather huge. The full data set for any particular report is rather huge.
The advantage of this API, I expect, is it allows people to make quick, machine readable queries for useful subsets of the data. If you want a JavaScript mashup that tells you the number of people who live on your block, use this. If you want to know the population of every block everywhere for data-crunching purposes, just download the CSV.
Excellent. Much easier than requesting API keys and parsing JSON. But that's just my opinion. CSV is beautiful. Simple and easy to manipulate into some other format if desired.