Modder HIJACKS Pirated Games

Right? its pretty fucking cut & dry.

Which is letting the pirates off lightly... dev's have much more powerful tools at hand (though maybe not as powerful as Nintendos! Jackass's should be glad they didn't have Nintendo coming after them (banned from online play, use of any Nintendo products and loss of rights to Nintendo products and it follows you forever across hardware and accounts! :D, makes this modder seem like a little bluebird of innocence! :D

A criminal buffoon at that.

It's not like stealing a car at all... sorry but that is, and always has been, a shitty analogy.

It is like watching TV without a license (something that you should have in many country's to avoid breaking the law) then complaining when a set-top box you got for free from Freecycle (or other internet freebie place) that upscales Game of Thrones to any size up to 4K (near flawlessly), makes the soundtrack customisable to your speaker setup and gives you a rundown of differences with the book each episode, bios on all the characters and double checks plot points in case you need to check on them during the episode then checks if you have a TV license and then stops you watching Game of Thrones if you don't (but lets you watch every other programme on the TV)...

If the analogy above were the case I'm pretty sure that the license board (and then police) would be unhappy that the modder had not made the set-top box contact them and report that person rather than letting them continue to break the law left, right and centre with little more than a slap on the wrist and withholding a few "cosmetic" changes from them.

(And as for the modding of the games files... well that's what a mod does, right? If you didn't want it to modify your files then it wouldn't do anything!)

How's it a shitty analogy? Someone made a product, another someone is obtaining and using said product without paying for it, then getting upset when some other someone tells them they cannot use the thing they made with their illegal product because it with create backlash upon them..
Just because one is software and the other is a physical item. stealing is stealing, from shoplifting to piracy to larceny to GTA, I like car in the analogy because of that old, stupid PSA, 

   (...you wouldn't download a car...) 

if you want to break it down completely, it's like one person buying a "car" and then digitally rendering it, and giving that render away, free, infinitely, to those with a 3D-printer-o-cars to make their own, who in turn make it more available to others..and that's the car the soundwarehouse tech reports "stolen"

People who use this mod are:

Breaching their license agreement since there are always "no modify" clauses in those,

Allowing mods access to the game files implicitly and explicitly by using the mod.

Pirates who use this mod are also:

Breaching the law,

Hosting illegal material on their machines,

Likely breaching the modders terms of service (explicitly if they try to continue to use the mod despite the warning).

Modders need to be able to modify your game files and you are already in breach of stuff by using them but a pirate has gone a lot further and is a criminal... that the mod didn't delete their files entirely once they discovered they were a pirate shows this modder was pretty polite... but also had yet to breach the bounds of any law - unlike the pirate who has already breached a number of laws in any country (probably more than a dozen in the US or UK).

The "Steam going bankrupt" argument is irrelevant to the story at hand as since Steam may well have in place unlocking all the DRM as their plan if they go bust... then there would be no problem about losing your library, right?