Reach for edge computing when latency is the product: live video, multiplayer games, AR/VR, autonomous vehicles, payment authorization, and IoT control loops where a 200 ms delay is unacceptable. It also helps with bandwidth, since processing a video feed on-site means you ship a small result instead of the raw stream, and with data residency, since you can keep data inside a country by processing it locally.
The cost is complexity. You now operate hundreds of locations instead of one, so deployment, monitoring, and debugging get harder. Edge runtimes are restricted: limited memory, short execution time, no full file system, and often a subset of language features. You cannot just lift and shift a heavy backend there.
Consistency is the real tax. Data spread across many nodes means you accept eventual consistency for most reads, and you have to decide what must be strongly consistent and route those operations back to the core. Anything stateful and write-heavy is usually a poor fit for the edge.