>>Ummm, then how do you explain Jack Vance - The Dying Earth, and Ray Bradbury - Dandelion Wine?
I suppose because even if their components started out as short stories, when they were published in book form they were intended by the author and the publisher to be read as a coherent whole, either as a novel or as something closely approximating one. There are also similar examples in Pringle's SF list -- Disch's 334, Bradbury's Martian Chronicles, Roberts's Pavane, to name a few. I do take your point, but the fact that there are a few items near the dividing line doesn't negate the fact that others aren't anywhere near it. Even if there is a thematic unity to Lovecraft's Mythos stories, Derleth certainly didn't attempt to market THE OUTSIDER AND OTHERS as a "novel" but as a short story collection and included a number of unrelated stories in the bargain, even going so far as to make one of them, the rather mediocre "The Outsider", the title story. The only Lovecraft item that comes to mind along these lines is DREAM-QUEST OF UNKNOWN KADATH, which Lin Carter edited for Ballantine in the seventies and which collects Lovecraft's Randolph Carter stories. There is an undeniable charm to these stories, which show Lovecraft at his most Dunsanian, but they are hardly representative of the best of his work.
Interestingly, Derleth did practice the whole short-story-into-novel alchemy with his own Mythos work, turning a series of short stories into TRAIL OF CTHULHU and MASK OF CTHULHU. But as with most of Derleth's original work, they're quite forgettable.
I've heard they aren't easy reads.
