"We passed by there."
The meaning is different: "We passed by (something) at that spot." While perhaps not strictly incorrect, it sounds incomplete, as if you omitted whatever it was that "we" passed. 经过 needs an object, and your order means that 那里 is no longer what was passed, leaving a hole semantically speaking.
Subject + verb + object, so that means "We" + "passed by" + "there"
我们 + 经过了 + 那里
It's not incorrect, but it's a little unusual. I've also been frustrated by 了 placement on Duolingo, so I asked a native speaker!
I forgot 在. It should be 我们在那里经过了. I wonder if it would be accepted.
As far as i understand, you need 了 to make this a past event here, because 经过 is a fixed expression (每天我经过公园 vs 我经过了公园).
I ask same as Jarek