Good points. It would mean someone at Sony and Microsoft are going to get paid to review and ensure mods submitted for console are within capability and content. I can think of worse jobs.
This DOES mean consoles probably won't get the mods that change lighting and redo textures...like Project Nevada and Nevada Skies...but it's the trade off. And it's a step.
Actually, now that I'm thinking about it, this is a revolutionary step. Mods on consoles. This is ground breaking. We're busting a paradigm here. We MAY begin to see consoles up the ante on their technology to try and bring themselves equal to PC gaming capability, if console mods start to become an industry standard.
It's an exciting time, to be honest.