Modding is a lot more approachable than making a whole new game. The only issue is most games aren't moddable. Some people still try to mod games that don't support modding and that's where you're likely to run into copyright issues.

Even if you get by the legal implications, you still have to deal with building a sandcastle on a surface that wasn't designed for it. Yes, that has always been the case to varying degrees, but I think it can make a big difference, too. Factorio has a good modding scene, and it's in part because it was wholly and intentionally embraced by the developers in their engine design.

In the FPS space, there used to be only three games worth modding for: Quake, Unreal Tournament, Half Life. You could make a mod back then and get tons of press and players if you could follow through. I was interviewed in popular gaming websites! The games themselves were quite simple graphically so anyone with a drip of talent, time, and motivation could contribute. That specific environment doesn't exist anymore. There are so many games now, it's an ocean, developers have exerted more control over their games, and the talent required to create content for FPS games is too high a bar now.

A very real impact was that modders got hired for their work. So there are less around from that generation that made literally free games for fun.

Modding is hugely poplar in RPGs like Skyrim and Baldurs Gate.