1)Who decides which mods are best and most deserving? Are Bethesda going to employ a whole series of reviewers to test huge numbers of mods? What about those that aren't chosen, but do something similar to one that was chosen?
System A. The mods that are overall ranked highest for each month by the major websites such as TESNexus and Planetelderscrolls are the "best." These best cannot always be picked because of requirements, so mods with requirements would need to combine into one for the purpose of a DLC. The authors would work out an agreement for making it one file. Bethesda or a small group for this purpose in Bethesda will contact you if your mod meets requirements. The mod must be well playtested before Bethesda will consider a mod. They could perhaps make a DLC out of the top five files of a month. A file could still run for this in another month. Every year, Bethesda could choose ten mods (not already chosen) to put in as DLCs. They could also give their ranking of the top 10 DLC mods that year even if already chosen for prizes. They could also give out prizes for monthly mods: for 1st in a monthly mod $250, for second $150, third $100, and for fourth and fifth $50. For 1st in yearly $500, second $350, third $200, fourth $150, fifth $100, and the rest $50. For best overall of a year: $1000 for first, $500 for second, $250 for third, and $75 for the rest. People will want to make their mods better to win the prize...
System B. People upload their mods to a gamesas page to apply for consideration. You would need to fit certain requirements to be picked. Prizes would be the same.
For those not chosen: secondary prizes: Free version of the months DLCs for top 25 participants. (console users in mind) Possibility of being hired. R-E-S-P-E-C-T. Possible other prizes.
2)Are Bethesda also going spend a considerable amount of cash, time and resources to bug test, port, bug test, streamline, bug test and upload the mods? They'd also have to go through this step everytime the modder released an updated/ new version. Some of the best mods are never quite finished but are constantly being worked on.
Bug testing etc. would be mostly up to the modder. If they want their mod as a DLC they should make their mod as good as possible. The modder would not be able to constantly make new versions. Perhaps an update every three months could be used. My idea tries to keep the strain on gamesas away, and leave it to the modders. They would need to be at at least version 1.0 to be considered (or a working version that is considered complete). For those never finished mods, they would be PC exclusive.
3)A lot of mods are incompatble to varying degrees ranging from minor clipping to entire buildings occupying the same space. Beth would have to test for this too and inevitably you'll get people ignoring incompatibility warnings and then crying that the mods are broken.
Most incompatibilities are obvious enough... Just make your mods elsewhere... If someone makes a new province, there will be tons of room, or if someone makes a portal to another worldspace, the same thing applies. If two really good mods are in the same place, perhaps the two modders can join together for a single mod for DLC purposes only.
4)Adding mods increases the amount of stuff that is being loaded as each mod is a separate file. This can increase system resource demands and consoles are made to provide exactly the amount of power the game needs to run at its baseline level. Adding mods would be a good way of overtaxing your system.
There would not be any higher res textures than a 360 or ps3 can handle, not all mods would have to be active at all times, you just get that missing plugin pop-up if on an old save-file. One of the requirements to be a DLC mod would be being able to work on both consoles, that means no outside source code or programs, unfortunately. Bethesda would have to make the game for the consoles with mods in mind... This doesn't mean they couldn't give you a full disk, It means there may be multiple disks, or something along the lines of that.
5)What about mod requirements? Some mods require other mods to run, such as compatibility patches for larger mods (ie: Better Cities and Uniqiue Landscapes have several such patches both to work with each other and with other smaller mods)
Where normally you have requirements and patches, people would have to combine a file into one file (authors fight it out) and a special DLC only version of both mods as one would be created.
6)It's all well and good saying that Beth owns the license on anything made with the GECK, but if they start selling other peoples work without giving them a penny, then that would pretty much cause a lot of anger in the mod community. Many modders spend ages on their work and do it because they enjoy it, but if Beth started making a profit off their work, then those modders would probably give up and move onto other games.
Read the above section on posts and this one about prizes and rewards.
7)Both Microsoft and Sony are reluctant to allow mods for this kind of game on their consoles. Unlike maps made with Halos Forge or ported over for UT3, the mods for Beths games are intergrated in the game world and not separate maps like those mentioned. That increases the chance of a bad or corrupted install screwing a game up.
Oblivion mods are very similar to Bethesda's official DLCs. If there is money involved, Sony and MS won't care as long as it is well tested and well made. You don't screw up a console game unless you install it onto your hard-drive or screw up your disk. It doesn't take long to install a game to hard-drive and all it does is make it run a little faster, so it wouldn't be gamebreaking. If the DLCs didn't install correctly... well that already happens, so there are ways of fixing it.
Also, sorry if it seemed like I singled you out.