Theft. That's the reason. People could upload others mods to be paid. Or they would use assets they were not allowed to sell. The cost of litigating this is far too high, therefore a system that allows the theft cannot be regulated civilly. Meaning the system should not exist.

Mods work better in an open and free environment that lacks monetary incentives.

We can't figure out how to protect content creators so they should just do work for free seems like a cop out to me.

Or maybe they know the cost and it isn't worth it to them? The poster you respond to mentions litigation. That's how IP theft is handled. How much legal fees does anyone want to incur for due diligence or litigation or defense for mods and plug-ins. Only the top few will earn enough to justify the effort. Everything under that will be left to fester. Quality free and low cost mods will get copied and promoted to scam money and the people working hard, that you and I both wish to help and support, would get no help or compensation.

Wasn't that mostly about Bethesda/Steam trying to capture the mod market and skim a percentage off of every transaction? Probably taking a page out of the iOS playbook.

If I have ever learnt something on tech related forums, it's that everything becomes magically okay when Apple does it and the benefits outweigh the costs.

Your argument falls flat when faced with rich history of modding and hacking. So many incredible creations were labors of love. Plenty of them eventually became commercial products.