And if they are actually blocking it because it would compete with one of their forthcoming products, then I would say it's a fair game move on their part. But I have no information on it outside of this thread.
I think another problem people are having with this is that this co-op mod has apparently been in development for years and Bethesda has known about it the whole time. So there is this suspicion that not only is Bethesda shutting it down for their own paid co-op DLC, but that Bethesda initially had no plans for their own co-op and essentially just stole this idea from the creators of this mod now that they actually are close to finishing it. The whole thing just reeks of raw greed on Bethesda's part in my opinion.
So... they've blocked one mod right? Overreaction?
The reaction is based on everything that's been happening in gaming recently. People are seeing this as yet another instance of a big corporation stomping on the "little guy" so they can squeeze more money out of consumers so their shareholders can buy a new boat or something. I think gamers in general are just getting tired of the corporate greed thing. It was all fine and dandy when gamers were benefiting from that greed as well (back when it was driving the creation of better and better games), but now that it's starting to be a negative for the gaming community, we are starting to see some pushback.
I mean, I've been reading that in the past year or so, governments in the US and Europe have been receiving increased petitions from citizens calling for increased regulation of the video game industry to reign in some of their more unsavory business practices. I've also seen more and more gaming journalists predicting another gaming crash like there was in the 80s. They say the current business climate in gaming now is starting to feel a lot like it did right before the crash in the 80s. They also cite overall decreasing sales for Triple A gaming over the past few years as a worrying indicator for the industry.
EDIT: I also just saw that sales at this point for Battlefront 2 are down 60% from where Battlefront was at this point after release and it is likely not going to meet its sales goal by the end of the year. Down 60% even after EA announced it was disabling the microtransactions and loot boxes. I'd say that's a pretty loud statement from the gaming community.
It also puts EA in a very difficult position. It seems now no matter what they do, it is going to hurt them financially. If they add microtransactions to future games, gamers simply won't buy them, keeping them from being profitable. On the other hand, when EA announced it was disabling microtransactions for Battlefront 2, a bunch of investors sold their shares in EA and the company's stock has taken a huge hit. So if they have microtransactions they face consumer boycott and if they don't they lose their investors and shareholders. Being in a position like this where they can't do anything without making everyone mad at them could mean we are seeing the slow collapse of one of the largest game developers/publishers in the entire industry.