Usually the word "distributed" refers to the system being composed of physically separate parts where different logic is performed in different places.
A typical distributed web application is such that there is one "web server", which hosts the View and Controller parts of the MVC pattern and a separate (or several) "app server", which hosts the
EJBs acting as the Model of the MVC pattern.
The advantage of this approach is the flexibility of the infrastructure. You can scale the hardware only for the EJB layer if you want, you can locate the web server closer to your enterprise network's edge while leaving the app server behind more firewalls.