The only reason I see personally for modding a PSP is to play pirated PSP games? or is there another reason someone would want to do this.
I also presume it breaks any warrenty and the CGA will be null and void between the user/sony/place it was bought from and you will fix any issues for a certain amount of time under the CGA which could be I'd say for a PSP 5 years.
modding a psp isn't only for playing pirated psp games. I personly am against piracy I have a modded psp and not a single pirated psp game though I doubt you would believe me as not much people do.
A modded psp is like it being unlocked Sony should of allowed homebrew and should of added more stuff to their firmware with a modded psp you can do everything sony should of added in the firmware
you can play homebrew (games not made by Sony), that do different things like let you watch youtube on your psp connect to your computer through wireless or usb so you can access files on your computer or use your psp as a extra pc monitor read text files play more types of media files I could go on for hours saying all the many things you can do.
also you can change the region of the psp you can copy your own psp games to your memory stick for much faster loading times and no loud umd spinning noise
most people only get their psp modded after the warranty has passed which if you have a psp fat would of been ages ago and If you send your modded psp into get fixed by sony they prob would just fix it and install the latest Official Firmware they wouldnt bother to check every psp that comes into them to get fixed to see if they are modded it would take to much time modding a psp isnt dangerous anyway