A PhD by publication replaces the main dissertation component of the PhD, with a series of published journal articles (or similar). These articles need to be published in suitably competitive and prestigious journals. They are then presented in a semi-thesis like manner by being given a intro and conclusion.

That's the main idea of a PhD by publication - instead of a single, whole, long manuscript, you produce a series of shorter article-length pieces which are published first.

While there are some advantages to doing it this way (you're published, and have a body of published work by the time you complete), it can also be very taxing - journal submission/review/rejections can take a considerable amount of time, and always have some random element to them. It's hard to get published, whereas you can write a thesis and simply get it accepted without having to repeatedly submit to journals.

It's not normal, as /u/RingGiver suggested, that a university simply decides a person's previously published body of literature is degree-worthy. A PhD by publication is still very much a PhD.