I think it’s also about the appearance of control. From what I’ve read over the years - with respect to music and movies - these people (the producers and such - are control freaks who do not want to give an inch back to the fan base. It’s their way or the highway. God forbid their fans get to have a little fun. That’s my take anyway.
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Good take, but I think you dropped a parentheses somewhere. I can help you look for it if you want.
It’s those damn pirates who took the parenthesis. Yeah, that’s it.
Gabe Newell already noticed this years ago. Leading to that famous “piracy is not a pricing issue. It's a service issue" quote.
this answer, however, leaves us with a question: why is Rocksteady adding Denuvo if piracy is not an issue for games that people want to buy?
My first guess would be a character flaw called "irrationality", based on Hanlon's Razor. Decision takers are also prone to dumbness, "chrust me", stubborness, rolling on wishful belief, and similar. So they would be doing this because they genuinely believe that it'll be better for them.
Blocking modders (as you said) would be perhaps my second go-to explanation.