Why do people cheat/mod?

Actually, I think your assumptions are spot-on.  They are pathetic losers.  

Just take joy in the fact that most if not all of them will eventually get theirs when the Enforcement Team gets wind of them, and do your part to make sure that happens.

For the lulz is probably one of the main reasons.

They do it to rob a regular gamer who doesn't cheat of having a good multiplayer experience. In all seriousness, they do it because they don't care about anyone but themselves.

I boost from time to time a little multiplayer, but atleast I have morals.  These are all little tykes, playstation and online weened babies who think the online portion is the main game rather than the single player campaign.  I'm sorry but age most definitely plays a role in this.  And the reason why they do it?  Insecurity.  To have some godlike little trip with people because they have been bullied and picked on throughout their school years.

Yeah, some stereotypes are indeed true.

Wow I can tell you really hate Playstation...

It's sad they pay like £40 on a game to cheat on :/

I use mods on the single player of PC games all the time, I think it is a shame that we aren't allowed to have that type of user created content on the 360. Though I could die quite happily if I'd not seen the sexualised Ogre mod for Dragon Age Origins.

So I don't think that someone using a save editor to give Shepard a different hair style in Mass Effect 2 can be referred to in the same way as someone who mods the multiplayer side of the 360 in order to ruin the gaming of others.

I don't mind single player modification on the pc where players have a bit of fun and have a pokemon running around shooting for example. But i am 100% against modding to gain an advantage in a game.

They are a bunch of talentless idiots who have no skill in a game and do anything to get the upper hand.

Like Anazoth said mods that allow people to cheat I don't like but mods that add to the game are acceptable.