(Daniel Farina) Database physical file fragmentation isn't usually taken into consideration very often as a performance issue. But, if the data files are fragmented, the database engine will take longer to retrieve data because of seek overhead or rotational latency in mechanical disks. In addition, "A heavily fragmented file in an NTFS volume may not grow beyond a certain size", if you have Auto Grow enabled in some very unfortunate situations the process could fail with the error: "665 (The requested operation could not be completed due to a file system limitation.)".
Read this article..