It was such a fundamental stunning misread of the situation that it was crazy to me, especially coming from Valve who are normally smarter than that. I expect that move from like MS or Sony. Not from Valve.
1.) "Normal" people don't prefer a situation where you have to pay for something where you didn't before. I don't care how good and rationale of an argument that a person will make. The heart will over-ride whatever the brain is saying. It's like if suddenly en masse people started charging for podcasts or youtube video content. You would get a similar backlash despite however much time one spends in producing that content. There are exceptions to this of course but generally the people who are doing it are going for a slightly more sophisticated audience. Not gamers.
2.) Went over this before but they targeted an existing organized community of an extremely popular game that had been around for years. Its almost a sacred cow. They would have been smarter going for a stealth attack with a new title or a title that isn't as insanely popular as skyrim.
3.) They talked about how this would be good for gamers but the initial batch of paid mods were awful. You could maybe get away with this if you were charging people for things at the ambition level of Skywind, Skyblivion, Falskaar, etc. But there was nothing like that. It was all horse armor dlc level. People were charging 2 and 3 bucks for individual weapons. That's insane. That's just as bad as publisher DLC that people rage about.
4.) Trying to use the team fortress, dota examples, they kept trotting out were insane. Those are free to play games from commercial enterprises. There is a tacit agreement when you play the game that you know what's up with the money model. There was no pre-arranged relationship like that with skyrim that consumers went into. They were trying to change it to that relationship. Which is a much much more difficult task.
5.) They never actually did investigate what the community wants. Maybe the community is perfectly fine with modding being what it is both the strengths and limitations. Not what Valve can turn it into.
I could go on and on and write a paper on it. Just dumb, dumb dumb.