Maybe the big developers wouldn't have incentive to develop billion-dollar cosmetic-powered games anymore, but someone would make it work financially.
You'd still have hugely popular multiplayer games, and maybe they would be somewhat less ambitious in scope and features (i.e. dev cost), but they would still be fun, and have strong communities built around them.
Maybe they sell DLC map packs (which would not have the "community fragmentation" problem from today's centralized matchmaking if private servers exist), or figure out other ways to generate incremental revenue.
Or maybe they don't, and just sell the base game, and are still successful because it's not a 5,000 person team and a nine-figure budget.
Today's games don't exist because of the business model, it's the other way around.
It's not 2012 anymore, 90% of players play casual where sv_pure is always enabled so you can't mod almost anything.
The original pre-matchmaking TF2 experience is dead. Modern casual is nothing like it and often feels indistinguishable from playing vs bots.
And (as with several other things being discussed in the comments) of course Valve has already done this, and offers it as a service: https://partner.steamgames.com/doc/features/inventory
I suppose not — to the degree that the backend doesn't just act as message/traffic coordinator but also has game logic. (Although I can imagine an architecture where the back end indeed just manages message sending ... and one of those recipients is the host app that handles the game logic.)
Funny enough, there's a Google for Games github org that has some good open source projects for things like matchmaking, cloud saves, etc https://github.com/googleforgames
Tower defenses and AoS/Dota/ARPG/Mobas as examples of the above from 90s and early 2000s. Maybe “gliding” is a genre too from counterstrike now seen outside in games like trackmania, and probably Gary’s mod is it’s own genre too. Then only genres and modes which live within the original games since (though amazing and well done).
I really think Blizzard had an opportunity with StarCraft 2 to rewrite gaming history if it’s modding tools were up to par. Instead we got custom games less sophisticated than ones 20 years younger from it. I don’t think the modding community ever really recovered being left empty handed in that era. Maybe it’s recovered, modders were left without adequate tools for a while. Modders really did produce hundred million to billion dollar genres in the past, I’m not sure if that is still happening.
No skin off your back other than "cutting into sales of thatsamegame, butnextversion", which people are going to buy anyway.