To a great degree, I think the key in answering the question becomes one of actual damage: "What damage does a software company incur if someone uses a third party application that modifies that software company's program?"
An end user is pretty free to do anything they want with their legally purchased personal property/software. I can modify my personal copy/license of windows provided I don't sell the result and damage Microsoft as a result. By doing so I take the risk of losing warranty, tech support and other services, but I'm not damaging Microsoft per se.
What financial damage does gameshark cause console game companies? I think it's a similar scenario.

