I've seen other games series use it, the only one I can think of at the moment are Red Orchestra and most of Valve's games. But there's lots of great mods out there and Bethesda could officialize (new word) it by improving graphics, animation,gameplay and making it fit in with the lore and in general expand it. All of course should be helped by the original modders. I mean big expansions with new areas and quests like Moonpath to Elswyer not horse-armour style mods.
What do other people think?

Mods are not for everyone, and every modder has different tastes. I think Hearthfire pretty much covered the mod part anyway by releasing it for the 360 so console users can get a taste of modding.

Mods also require a lot of technical stuff, and since Behtesda already is pushing the 360 to its limit with Skyrim, I doubt they can squeeze in something fan made (That is if they ever did).

eh the majority of quest mods are...lacking. (they're free, and some of them are amazing don't get me wrong) But the majority of them are lore breaking, involve the most bewb-alicious armor you've ever seen, and its also pretty dikeish of bethesda to sell fan made content that fans make for free