Logical separation, the modules, is what allows to preserve developer sanity. Physical separation, the (micro-)services is what allows you to ship things flexibly. Somewhere on the distant high end, microservices also play a role in enabling scalability to colossal scales, only needed by relatively few very huge companies.
The key problem of developing a large system is allowing many people to work on it, without producing a gridlock. A monolith, by its nature, produces a gridlock easily once a sufficient number of people need to work on it in parallel. Hence modules, "narrow waist" interfaces, etc.
But the key thing is that "you ship your org chart" [1]. Modules allow different teams to work in parallel and independently, as long as the interfaces are clearly defined. Modules deployed separately, aka services, allow different teams to ship their results independently, as long as they remain compatible with the rest of the system. Solving these organizational problems is much more important for any large company than overcoming any technical hurdles.