I have to say I strongly disagree with the statement that this is the end of modding. If you think that this was somehow 'the first step' you haven't been following what's happened the last five (or more) years. This development have been pretty much foreseeable for a long time since the availabilty of game development and content for games via editors increasing drastically due to developers reaching out a helping hand for all users. Take a step back and look what's happend the latest year.
Ever heard of these titles? Dota, League of Legends, Heroes of Newerth, Defense Grid: The Awakening, Chivalry: Medieval Warfare, Counter-strike, Natural Selection and more. You know what they all have in common? They have all been mods, going way back in time.
I could totally see this growing into a world where mods could be 'greenlit' to be extracted as games of their own, with the developer's consent as well as the modders. If you think of it, extracting a game like that would not be very different at all from developing a game in any middle-ware today - you could probably see it as a mid-middle-ware of some sort. Now of course you could go all Blizzard over the EULA and say 'Hey, we own all your shit you do in our game.' But hopefully it could be more like a partnership.
The games industry may seem very big today in terms of sales and how much media attention that's going on but really, I still think we're far from the peak-oil of game development. Maybe games will server as 'incubators' for mods to grow up and become a real game.
As an industry as a whole, I think this is a very good thing.