@Tibs: Because not everyone is under control of a government. Some people are independent and just handle things their own way. While this is not the case for everyone (you're quite right), some people want to do it, plain and simple. They want to be modified, for one way or the other.
@Silas: Obviously there are limits to what is and isn't 'too much.' Like I said, a big walking tank of death that can't be killed AND is a capsuleer is getting into 'wat' realms. But someone who's modified to say...use a sniper REALLY stupidly well, or modified to engage in hand to hand a bit better (i.e. reinforced arms and fists etc), I don't see a problem in that. When it comes down to it, it's all about balance.
Also, imo, IF you're going to be super moded, you need to have some kind of negative side effect. For instance, electrical pulses could mess your implants up, infections could REALLY screw you over, or just a plain old shot to the head you can't avoid. If you take a 50 cal sniper and put it to someone's head, I don't care if you have the armor plating of a tank on you, no one is getting up from that.
Also also, moded people and violencing makes life interesting. I don't know about you, but just sitting in Summit arguing the same things again and again and seeing the same discussions again and again while we wait for CCP to further an arc is just not fun. We have it well within ourselves to make our own arcs and own fun, so why not do it with violencing and the occasional freaky modder? It's a game, let's have fun with it!