Bob,
It is passive in that it does not offer any voltage gain. Only volume control. In the case of passive buffers (of which the Dodd tube buffer and the FirstWatt B1 are the two best known) will also affect input and output impedances as well as providing no-gain volume control. For non-buffer passive preamps, sometimes impedance mismatches are responsible for less than ideal sound (particularly if a source has a high output impedance).
Particularly with digital sources, which tend to have 2V output signals, the idea is that no additional voltage gain is necessary. For phono outputs, often the signals are much smaller, so make an active pre necessary for certain sound levels.
But in my experience with the Dodd, while it was an excellent preamp, it still did not entirely overcome the lack of dynamics and oomph that I tend to associate with passives I have tried out in my system.