For many years now, developers within the Minecraft community have been modding it. Be it the form of modifying base classes, or using an API such as Minecraft Forge or Bukkit.
It wasn't until Minecraft 1.3 that modding had all of it's current capabilities however, as that is when the client and server were merged. But that raises the question of why there was no community effort to do so before hand.
But to understand what I'm about to say, you have to realise why the merge is so important. The merge allowed tools such as Minecraft Forge to branch out (even Bukkit could have) to the opposite type of modification it was supporting, eg Minecraft Forge can now support servers running client mods natively, and can also support being used for server mods.
So why didn't the community try something like this before? Because we had a setup that worked (albeit a painful one), and that was enough. This was through the form of MCPC. Before Minecraft 1.3, this was a project which ported client mods to Bukkit. This added an extra (and tedious) step for the mod developers.
So to advance further into what this post is talking about, is Minecraft Modding still being done wrong? Well, Minecraft Forge now supports server mods, and as long as client mod developers make their mods properly they work on the server too. Sponge is being developed to supersede Bukkit and related projects, and also being built to run ontop Minecraft Forge. So I think we have pointed Minecraft modding in a great direction and I can't wait to see what the future holds.