Why is it not possible to apply for ordinary passports online or at the Consulates?

According to the Swedish Passport Law, Swedish passports must be equipped with biometrics including the passport holder's headshot and  fingerprints. 

Collection of biometric data needs to be done for each new passport application. The passport holders’ biometric data is only stored in the passport chip itself. As the biometric data is not stored in a database, it is not possible to retrieve it to reuse in future passport/national id-card applications. This means that personal attendance is required for each passport application.

Consulates are not equipped with photo stations and are not authorised to issue ordinary passports/national ID cards. However, you can pick up your new passport/national ID card at any consulate in the UK if you notify the Embassy.