Actually, to be fair, before Hot Coffee hit Rockstar loved modding, and actually back in the DMA days released their formats and info so people could custom-mod GTA1 and 2 (including level designs and so on). In GTA3 they kept a number of formats the same and I think assisted some of the modders to get the other bits of the 3d stuff down so they could continue to work. In fact, GTA 3, VC, and SA are probably the best examples of that, where the PC versions are far superior to the console ones, not just for modding but for unmodded features.
Then the Hot Coffee scandal broke (which was totally their own fault, if you don't want the modders you've previously encouraged finding your almost-done 'risque' minigame,
DON'T LEAVE IT IN THE CODE DISABLED BY A SIMPLE BINARY FLAG!) and the first thing they did was blame the modders because it's that or admit they had actually left the stuff in the game all but ready to go.. effectively severing all ties with modding and throwing them under the bus. They changed the code so it couldn't be easily modded (the 1.1 patch for SA, that's pretty much all it did as well as removing the bits of HC code), and when GTA4 came out they were already openly hostile to modding to the point of using file checks multiple ways and constantly releasing little patches axing any of the used circumventions to make sure you can't do it.
It is kind of sad in a way, it's obvious that Rockstar influenced a lot of companies, and let's face it when people talk about the Saints Row series they call it a 'grand theft auto style game'. It's a compliment, the games take what GTA was and distilled it to purest essence, and ramped it up. Rockstar on the other hand went the other way, and in turn I never actually finished GTA4 because it just rubs me the wrong way. Too slow, the cars handle like boats, and it's all grimdarkmoody.
Of course, that's not to excuse any of the other problems with the Kotaku article, but at least the one point holds. Volition is moving intoi the old-school Rockstar territory. Makes sense. They already showed they can do that fun style of game better (as R* gave up and moved to more 'serious' GTA games) so now they'rer gonna show they can do the modding thing too