I'm doing my PhD by distance, unofficially. I'm lucky that my project doesn't require access to specialist equipment/facilities, and PhDs are typically very independent anyway, so it enables me to live at home and save money. I've always been a pretty strong self-starter, so I don't need to be on campus to feel motivated.
I don't think I would have chosen to do my undergrad or MA through distance-learning though (unless my circumstances prevented me from attending in person), as I would have missed out on a lot of friendships, events, and learning opportunities.