Supposedly I heard that Bethesda said in a Q&A/Panel/something that the Xbox could definitely handle several mods out there. However, it's Microsoft that won't allow the mods to be installed/run. Due to their rules and such, modding your Xbox results in a ban from Xbox LIVE.
(I think that is what we're talking about)
Exactly. That's why Steam is moving towards Linux, Microsoft is changing Windows into a closed platform like Xbox making mods and even. Steam itself unable to function correctly. This also means PC under Windows could lose the advantage of being moddable. A Monopoly is not good people, it makes everything expensive and mediocre.
Too bad, Microsoft has started it already, programs like Steam for example can't use all Win8 functions because it's not owned by Microsoft, and Valve now has to pay to be on Windowns, pretty sad that it can come to this, maybe the EU will sue them for creating a monopoly again, not that they don't have to money to pay the fines they would get.