[MereInterest]

I'm not so sure. As soon as you start having monetary incentives, you lose on the social incentives.

For example, suppose I ask for a friend's help moving to a new apartment. The friend says yes, and the move is finished after a full day of moving boxes. At the end of the day, I tell him thank you, and give him $5. The friend is insulted. Do I value him that little? What he would happily do for free, he refuses to do for $5.

The same is true for mods. A modder may pour his/her soul into making a mod, all the while thinking of how people will enjoy the mod. The modder has a few friends, and they enjoy discussing it. Now, the modder is offered a pittance. Suddenly, it is an insult, because the amount is so low.

Unless you are offering sufficient monetary compensation to outweigh the loss of the social incentive, you lose. No, it isn't "rational", but it is how people work.

[UK-AL]

The problem is these guys probably have full time jobs as well as modding.

If you had a decent way compensating them, the more popular mods could have full-time people.