blizz devs simply looked at their player base, measured how many were using mods (and which ones), and used that as a metric for whether or not to create content based around the assumption players were using them. they knew that enough people were using that mods that *without* increasing the difficulty to account for it, the fights wouldn't be challenging enough.

so as wolfie said- they designed content you don't need mods for (5 man dungeons), and content you do need it for (hard mode/heroic raids)