Modding a system that you personally bought is not illegal. Using a modded Wii to play out-of-region games that has been legally imported is not illegal. Using a modded Wii to play a backed up copy of a game that has been legally purchased is not illegal.
If all of this is going on, and no laws have been broken, why is this considered against Community Guidelines?
I do agree that what is done AFTER the fact can be piracy, an illegal act. I do not condone Piracy, but do believe that people have a right to do with their hardware as they see fit.