They see that something is good and people like it, so they copy and sell it. Their product is arguably better (just cuz its an expansion, not an "ordinary mod") and the mods get stripped of part of their fandom in favor of the expansions. Then what's the point of making mods if game's developers copy your ideas?
The sad thing is that Yoshi tried to get his Pirates&Fishmod released as DLC, but Talworlds rejected (or didn't answer, can't recall...). Shame, since that mod would be for sure worth it's money. Anyway, few months after that we got info that WFaS developers started to make this game. I don't really know what to think about this all...
edit:
it was a mod made for the original M&B by SiCH.
There was no mod developed by SiCH. If you're thinking about the WFaS mod for original M&B game, then the mod is still there. It switched to Warband, changed the main concept, the name, but it's still a free mod.