One big downside to Google appEngine, is the fact that you can't get your application files back from the server. The development happens at your PC, and you uplad to the server. Now, if you happened to lose your data from your PC, you can't fix your app anymore, even though the files are clearly on the server, and it's serving them, you cant get your files back and keep working on them.
The application is running, but your source is gone. Now, how annoying that could be..