The inability to mod for profit was due to legal constraints and in some part the lack of a way to deliver the product, that's it. Reading anything else into it is pointless
It doesn't matter whether it was due to legal constraints, physical constants or swarms of gregarious parasitic dongs from Mars roaming the planet and lethally sodomizing anyone trying to sell mods.
What matters is that such a limitation was there since the beginning, was expected to remain there for long, indeterminate period of time and that the community has grown around it, like it would around any other persistent environmental factor.
clearly illuminated by just how many modders joined Valve's experiment here.
It doesn't illuminate anything beyond people's willingness to jump on cashgrabs.
If you needed this workshop fiasco to explain that to you, then I'm sorry but the modern medicine can't fucking help you.
And of course one dynamic produces a unique result. The question is does it produce the superior result? We don't know, and I don't like to willingly throw myself onto an assumption that one system is best thanks to the complete and total absence of another system.
We have this nifty newfangled thing known as insight based learning.
This means that apart from poking things randomly trying to get them to do something useful we can construct mental models based on our understanding of situation:
Now lets try in detail explain why monetization of Skyrim mods is a bad idea.
First why it damages modders:
1. Go to Skyrim Nexus and look utilities category, you will see large number of programs that was made free by modders for modders to make their life easier. Now imagine if a newbie modder needs to buy many of them in order to just start modding and to level the playground with modders who use those tools, imagine how many of them would quit before even starting.
2. Go to description of any bit more complex mod and see a list of mods/programs/plugins you need to have before you can run them. Now imagine for you to need to buy all those additional stuff before playing that mod, and in the same time imagine how much money creator of the mod needs to spend to use other modders assets or give royalties. So not only you need to pay for additional addons just to start a mod but also modders will inflate their price in order to get some money back. Take for example SKSE something thats pretty mandatory for modding, what if the creator instead of giving it free wants either a flat fee of 500$ per mod or 30% royalties of sales, maybe its too much, but he can say take it or leave it, then imagine other modders asking similar demands. I bet people would rush into modding scene.
3. Go to Skyrim modding community and ask for help starting to mod, you will get lots of helpful advices and people linking to many tutorials and guides. Now imagine doing the same among people who sell their mods, they will tell you to fuck off because why should they help a competitor who would take a extra slice of already sliced up cake.
4. Go to any more complex mod and see credits list. You will see large number of modders helping out with the creation of the mod. They do it for free to help community get more quality mods and make advancements from which entirety of community will have use from. If the mods are paid why would they waste time helping others make money instead of working for themselves. or should all these people also ask for royalties of flat fee before helping.
Why it damages players:
1. Just to start adding mods to Skyrim (anything but recolors of vanilla items) you would need several different utilities that are mandatory for making a stable modded Skyrim. So right from the start you need to spend money just to make Skyrim moddable. Then if you want to buy a bit more complex mod you would need to get several other mods just to make that one alone work. But modding Skyrim is not about one or two mods, average number goes near hundred since many of them require others to work properly. Now imagine cost of hundred mods, its one thing to ask 1$ for a reskin of a sword but how much would someone charge for large overhauls and different large mods that are considered mandatory. You would realize that you would need to spend several hundred bucks just to make Skyrim into a decent game. So how many players are ready to spend that much money and how many of them will abandon Skyrim, refuse to purchase following game for fear of same thing happening with it or how many will just pirate everything.
2. One of the biggest problem with Skyrim modding and using large number of mods is compatibility of said mods. Installing two mods directly to data folder and starting them up together many times will result with CTD, so modders made utilities, patches and detailed guides to make them work, so get ready to spend money on that too. With people selling mods it will be in noones interest to make its competitors mods work, especially if you can make money of it.
3. One of the most popular mod on Nexus is Unofficial Patch made by modders. Modders have for a long time been fixing the game Bethesda left buggy as hell, they did it for free for community. Now imagine you need to buy a patch for the game.
Tell me about any game where people need to buy patches and that its a good idea. Will Bethesda use all this to release shitty buggy products in hope modders will fix it and they earn extra money, well im sure they are nice people who would never do such a thing.
You will have a splintered community in half, one that sells mods others who do it for free only thing in common they will have is refusing to work together in fear someone will steal their work for profit. And that kind of community would not be able to produce half as much of quality mods as we have now. But hey few people will make some money and thats a fair price to pay for destroying a community with which almost everyone except few nutjobs were happy for years. And you will have large number of players abandoning both Skyrim and future Bethesda games.
Second, it isn't necessarily total absence of another system, merely protecting the part of the modding community that would actually suffer from its intrusion (whether it's doable in such partial way, especially given preexisting modding community dependent on its own preexisting structure and toolsets is another matter).
There's nothing stopping anyone from cooperating with one another.
Of course there is. You don't want to cooperate with someone you compete with. Duh.
I mentioned earlier that someone with an important script could theoretically withdraw it from the rest of the community. But in a monetary system they would be doing this at their own peril.
Durr.
What peril?
Relying on external paid resource cuts into your profits (as you have to adjust your price to account for the fact that your customers will need to buy it as well as your mod), relying on free one - well it assumes there will be a free one that can be trusted to remain free.
All in all the best option is to either do your own resources and spend less time on actual mod, or avoid using additional resources and make simpler, feature poorer mod.
Great success of grorious capitalism.
Nobody and nothing is irreplaceable.
That depends on stuff like available talent pool and whether or not someone/something isn't already a cornerstone of your environment.
This was what you originally said: The stuff you want already exists. It's called independent game development.
No, that's not the stuff I want nor does it exist. The suggestion that, say, a full conversion mod is in line with a full-on indie game development process is asinine.
Indie development is commercialized and fully competitive. TES modding is non-commercial and largely cooperative. If you undermine reliance on other mods (that you compete with for player's finite cash in a commercial environment) then why not go all the way and toss the reliance on someone else's game out as well?
You do like your assumptions, along with a big bowl of bad comparisons.
Hyperbolas, if you don't mind.
We do not know what sort of system would unfold out of mods being paid for.
We can predict that and nothing in community's reaction (supporters of paid mods in particular) suggests anything to the contrary.
The argument that competition would be ruinous begs the question, what if it wasn't Skyrim? What if it was Elder Scrolls VI, fresh out of the oven? Would the argument revert to something else, all this verticality you speak of being nonexistent?
Then it would be less severe but I doubt TES VI will offer desired functionality without some script extender (not after MWSE, OBSE and SKSE) and critically important unofficial patches and mechanical overhauls.
Without the tangle of preexisting mods and with right provisions against selling essential modding resources and patches, plus provisions for taking cut when your resources are used commercially it might be workable. Something to limit profitability of minimalistic shitmods would be desirable as well.
Again, if I can pay for Beth's Dragonborn, I might as well pay for some modder's Hagge (Hagge was high quality PL content mod/mini expansion for Morrowind).
Feels before reals with a touch of authoritarianism.
Yes, 100k>10k is all feels and stuff.
What you've stated is fairly emotional. His $10k costs nobody anything but what they paid.
It cost community $100k of paid mods that would be made if his content was available for free - and that's conservatively speaking.
Again you can invest into such modder as developer (because his free mod will give you far more in cuts from other mods using it), donate as player, or give him opportunity to demand his cut from commercial modders, but you want his mod to come free of any sort of price tag because it fuels modding community that generates awsum content (from players' POV) and profits (from dev/Valve's POV if you have commercialized mods).
This is exact same reason why you don't want to sell your toolset but give it for free instead.