Modding Morrowind on Steam is alright although you will have to change the .bsa file's dates from 2009 to 2002. This is extremely easy, all you have to do is follow the steps on this web page: http://www.overclock.net/t/528344/solution-for-morrowind-on-steam-not-modding
The Morrowind Code Patch can instantly re-date the BSAs for you, making it much easier than that method.
http://www.tesnexus.com/downloads/file.php?id=19510