I think that there is a little difference. The hermit lives by himself in a ramshackle house halfway up the mountain.
I made it myself is a less formal and more usual way of saying I myself made it.
This emphasizes the fact that it would be usual for someone else to make the article, but instead, I did it, without help from anyone else.
When you say 'by myself,' it indicates either the state of being alone, or that something is being done by a baby or a child.
For example, we would say:
Little Betsey is only four years old, but she can tie her shoe laces (all) by herself.
On the other hand, we'd omit 'by' from these sentences:
A: Mm! This cake is delicious, Monica. Did you get it at the Gourmet Fancy Bakery?
B: No. I made it
A: Jack had a heart attack!
B: Oh, how terrible!
A: Yes. He didn't want to wait for an ambulance, so he got in his car and drove himself to the hospital (or, drove to the hospital
This is not to say that sometimes we do use 'by' in situations like the ones I've described. But usually we don't.