It undercuts modders, for a start. People who want to create things for games get shunted out, because only approved mods will be published. Releasing them for free on the internet is going to cause legal problems with game companies.
People are sick to death of paying for the same game over and over again, whether it is pay to win, DLC or something else. You can guarantee that the quality of mods would immediately drop as soon as this became an industry standard, because they would churn them out as quickly as possible and put the least amount of effort possible into them whilst still getting people to buy them.
Another issue is the way in which it is approached. This exact same thing happened a couple of years ago with Steam/Skyrim, and people were very very opposed to it. A few months ago Valve hinted at bringing back paid mods, and surprise fucking surprise, it looks like the idea came from Bethesda again. Not only this, they package it as "Creation Club" and then refuse call it paid mods when asked directly in a Q and A. People don't want to be treated like retards.
I genuinely do not have anything against idea of paid mods. I probably would not pay for any, but I see how it could be a project smaller than creating a game that could bring new talents to the industry.
And well, paying for something some other person worked on is not an alien concept. Why would mods be different than paying for whole games?