All editors are modal, just to different extents. In Notepad, if you type a letter it inserts it, unless you have some text highlighted, in which case it replaces that text. "Some text is selected" is a mode.
The big thing that classic vi got wrong with modes from a usability perspective is that changing modes is mostly invisible. In vim, however, you can configure it to change the cursor shape in different modes, and this is a pretty effective cue. (It's also the default behavior in gvim.)
This problem can be mitigated to an extent with a vim setting to change the cursor from a block to a vertical line when you enter insert mode. After using it for a bit your brain will learn to look for the vertical line before typing.
The big thing that classic vi got wrong with modes from a usability perspective is that changing modes is mostly invisible. In vim, however, you can configure it to change the cursor shape in different modes, and this is a pretty effective cue. (It's also the default behavior in gvim.)