If we move sites/all/modules to /modules people are never going to realize they can do sites/
mysite.com/modules. Then it doesn't also fit into the standard paths for other things like sites/all/libraries and sites/all/images, etc. In all honesty people are going to not read documentation and hunt for where to install their modules. People will still find /core/modules and put contrib modules there anyway. How this is solved is via the new module install interface in D7 and being able to select modules to include when downloading from
drupal.org so it automatically packages things correctly.