Untamed one on reddit explained it very well.

Valve really didn't think this through. There are lots of problems.

Modding is kinda like the wild west.

First, modders don't own the IP they are editing or might be selling.

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  Many mods are simply tweaking the values of various systems built into the game. If I add +2 damage to a weapon, I don't all of a sudden own that change. For basic edits just about anyone could make the same change. They could even steal the mod I made, because how would anyone know the difference of 2 identical changes. I expect to see hundreds of nearly identical changes flooding the market because no one can truly claim a copyright.
  
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  Many mods borrow content from other IPs. They are mostly ignored, but on occasion companies will initiate legal action out of principle to protect their copyright. Once money becomes involved you can expect just about every mod that even has a hint of borrowed content to come under legal action.
  
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  Many mods are compilations that may or may not have permission from the creators. How do you sort out which modder gets payed what? By man hours? By quality? By favoritism? By participation?
  

Second, paid modding fractures the community.

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  With Steam being the market leader, they set an example to be followed. They are encouraging modders to pull mods off other sites to sell on Steamworks. So if paid modding becomes common I expect modders will simply all open their own marketplaces where they get 100% of the cut.
  
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  Many mods have dependencies that rely on other mods they didn't create. Some mods are so critical that they could single-handedly bring down huge portions of other mods. Imagine if the script extender people started extorting smaller modders for money. Much of the amazing work done by the mod community depends on cooperating and sharing content freely.
  
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  The prices people are setting are not reasonable for fans of mods. I know a few people that run hundreds of mods simultaneously. If they charge .50 cents each and I run 100 mods, that is already $50. So what is likely to happen is costs would make it prohibitive to get large quantities of good mods for multiple games. This would split the community into swarms of mediocre freebie mods and few higher quality mods for money. It is almost like Steam/IP holders are trying to poach the good mods and make money they don't deserve.
  

Third, paid modding isn't the same as DLC.

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  There is no way to check if the mod files are legitimately purchased. People could simply share files. The executable isn't logging into some central server to see if your mod key is legit. This scheme is simply unenforceable as it is now.
  
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  You don't get the same kinda of protections buying from a modder as from a company. You expect a product to work when you buy it, but if you buy from a modder it is entirely up to them if they want to fix any bugs or not. The game company could even release a patch that makes it nearly impossible to fix a bug and you would simply be a victim of robbery.
  

Last, paid modding as it is on Steam is unfair to modders.

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  If a modder wants to create legitimate new content not tangled in any legal grey areas, Steam and the original game company don't deserve such a large cut.
  
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  Effectively it is functioning like a black market where the IP owner and the distributor will look the other way if you pay them off. The consumer then is sold a product with no guarantees other than the 24hr refund window. The modder isn't getting any tech support from the game devs and Steam just makes it downloadable.
  

Those are just some of the problems off the top of my head. I'm sure there many more.

Valve ignored the fact that most modders don't start to make money.

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  Modding mostly starts off as a hobby to improve a product they already like or to use an engine as a sandbox to build their own game in.
  
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  For those that want to make money they either create content as a portfolio to enter a real game dev studio or they work on a commission/donation basis.
  

Edit: Just wanted to add one last thing. If Valve wanted to do this the right way they would have created a community generated DLC platform.

• Steam and the IP holders would be expected to vet the content before it went on the market.
  
• Once vetted the IP holder would be expected to provide some tech support/mod tool assistance to the creator.
  
• If the creator abandons the content with serious game breaking bugs, the IP holder would be expected to take over and fix the bugs or a issue partial refund in the steam wallet (like a limited warranty).
  
• Steam would generate keys like any other DLC to protect the content.
  

The point being if the IP holder and Steam want a huge cut, they need to be taking responsibility to improve the quality and maintain customer service while adding value for the creator.

Source: What's your opinion on paid mods?