Search engines such as Google rank search results based on the relevance to the search query and other websites linking to it. Google PageRank has not been updated since 5 December 2013, however, Page Rank is still being used in the Google Algorithm as John Mueller has confirmed this on 02/06/2015 in a Webmaster Hangout.
What still affects the ranking is Page and Domain Authority. Evil-minded people take advantage of this, by gaining illegally access to their victims webhost and adding a sub-domain or a sub-page. Those sub-pages are providing content which is mostly complete different compared to the root domain. The sub-page contains outbound links and benefits of the roots domains/page authority, leading to a high ranking on search engines.
This method became very popular in 2007, but is still being abused today.
In contrast to website defacement parasite hosting´s main goal is profit, either through sales or other kind of advertising.