I know old Prey tech stuff looked like Narbacular Drop (or vice versa) but either way, Narbacular Drop had it first.
I haven't really thought about the mod-to-commercial-product thing all that much. I knew about it, and CS/Garry's Mod/Portal are all very good examples of it. It's certainly bad for the consumer in that they have to pay for the content, but it's good for them in that they have a higher-quality product (in theory. I haven't played much CS, and I don't know how Garry's Mod was before the buyout. Portal certainly does look cleaner, but that's probably just the engine.) They also pay the developers of the mods to keep developing (Is this the case with CS? Are the original people still onboard?). I mean, if your job was to develop paintball2, then you'd be able to put a LOT more into it, right?
Of course, then there's the issue with Valve controlling the content and all, but I don't know if that's actually an issue.