"How is that different than an instance?"

It's true, they are pretty much the same. But people are suggesting it to solve one of the largest problems Blizzard sees with World Bosses.

The problem is the race to get to the boss first and everyone else is SOL.

What makes a Boss, well, a World Boss?
Some people say that it's the availability to only the quickest and best. Blizzard has already stated that they do not like this "race to the boss" so even if you like it, this is out of the picture.

So what makes a Boss, a World Boss (That is available to everyone) Take a look at the other elements.

1. Can been seen and heard out in the open.
2. Spectatorship. If Uberguildofawesomesauce is going to try to take him down, you'll have people cheering them on from the sidelines or other guilds waiting for them to fail and the subsequent "lolz".
3. And to a lesser extent, PvP. We don't want PvP going on with the engaged raiders (another problem Blizzard doesn't like) but PvP before the boss and battles between waiting guilds can be pretty fun. Some guilds used to have 2 teams. A team for the boss and a team to hold a defensive line to keep the PvP away from the boss. Something like this can be fun too.

Phasing those who have killed the boss that week allows everyone access to the boss. And yet, keeps all of the other elements of a World Boss.

It's an idea of many that could work to accomplish the goals Blizzard wants from World Bosses, but it is certainly not an invalid one.