It wasn't a bad idea, but it was poorly executed. Paid mods could be great for game communities, as it can encourage more high-quality mods, allow modders to finish projects that they can't otherwise afford to work on, or even result in professional modding teams that can make a living from making good mods.
The problem is the blanket approach. Really what was needed were two types of payment:
Rate & Donate: When a user rates/reviews a mod they would be given the chance to make a donation if they liked an eligible mod. After all, it makes a lot more sense this way round than sites that ask for donations up-front for a mod you haven't actually installed yet. Combined with better visibility for eligible mods that you haven't rated yet, this could allow voluntary rewards for otherwise free mods, but in a non-intrusive way.
Paid Mods: This would require a submission process to evaluate the mod, allowing it to be checked for copyright infringement and assessed for the level of new content. In this way, mods with substantial new content can be be given a better percentage of the payments made, and this form of payment can be limited to more significant mods such as DLC sized expansions, all new armours (with complete new models) etc. It would also however come with a requirement on a minimum level of support; if the mod generates complaints that aren't addressed, then it can be pulled with refunds issued to anyone whose payment is still in the holding period. This way you don't have the risk of paying for a mod only to find out it won't work or is buggy.
This would give modders all the tools they need to support their style of modding; as the majority of free mods can be rewarded voluntarily, while bigger projects can target a price-point that they think can justify the time and effort (and lost wages from jobs) to work on it, allowing for more, bigger, better projects that are simply much too difficult to organise for free.
The percentage was definitely a problem too; even 50% would have been pretty steep. I think it would make more sense to have a pricing structure, i.e- for donation ware mods the cut would be based on total income per week/month, while paid mods would be evaluated and a rate set based on the price and content.