So Cathedrals are good, except when they're bad. And parlors are bad, but bazaar's are good.
Quick, let's throw a couple more kinds of structures in there, we need more diversity.
Comparing the two ideas is a bit difficult. Cathedral style modding has the benefits of the bazaar style for open source, but generally keeping with the tradition of GNU projects (Freedom good, freedom for all). Parlor style modding has the general structure of cathedral style for open source (my project, I do what I please with it, appeal to the ruler, this is a monarchy).
The movement from cathedral to bazaar is generally good, the movement's goals were strictly business and greed induced. The monetization of a cathedral style modding community is a movement to a parlor style for money. Its the same thing happening, in someways in reverse, in others identical. Except cathedral style modding has the best of both worlds in my opinion, it uses an open structure of inclusion (the bazaar in this case, all are welcome to share and contribute), but it maintains the moral high ground of the free software movement. Its no coincidence that the open source movement considered themselves like a bazaar, they're open for business, where the free software movement was adamant in their beliefs. See the symbolism for what it is.
Cathedrals are great, open-source is great. It exists perfectly fine in the same market as closed-source, payed software.
In fact, people steal open-source software for their own projects all the time... Yet AFAIK never go back and claim sole rights to what they stole, even after three years. Hm!
The open source movement generally is to get paid producing an open source product, having other people work on it for free, so that a business can profit off of it. I use a number of these frameworks (typically under the MIT license) all the time. They're useful, but if you contribute your work is being used for others to make money. That's part of it. If you don't want people using your code to produce non-free (free as in freedom typically, but that usually comes with no money) then you're using a GPL, and fall within the free software community. There is gray area, but that's generally the way it falls.
Edit: Also, the licenses used in open source (and free software) communities have weight. You can't claim you own rights to those works. Mods being derived works, derived from very heavily licensed software, have a different legality. Its also worth noting that during the schism between open source and free software, code did illegally exchange from one license to another, and that's a problem, but the communities diverged and it wasn't a permanent problem.