Exactly , some people do mod their consoles in order to run homebrew programs. For instance my Playstation 2 is a modified console - this allows me to run Linux on it or to play pong or even run GameBoy colour emulator to play some classic GBC games. The main reason why its modified or what-so-ever its because to allow folks to come up with homebrew applications and programs. This concept applies to iPhone as well and its known as jailbreak

That's why SONY came up with a method to prevent PS3 from being modded for the purpose of running homebrew stuff - instead they allowed folks to run Linux on it so that they can experiment with it and run their own programs in Linux ! - Smart eh