For example, my first case mod was a blowhole. I used a circular saw to cut a 92mm (4inch) hole in the side of my case, just over the CPU. I then mounted a 92mm fan in this hole, blowing air outward. The purpose was to ensure better airflow/cooling for the system.
There are far more extreme examples of case modding, just for cooling.
Also, it can be done for aesthetics. Cutting an 8" X 8" hole in the side of a case, and mounting a lexan window ot cover the new hole would be an example. Add a cold-cathode tube to the interior of the case, and it can look pretty slick. Painting the case is pretty popular as well for aesthetics.
Frequently, a person that mods his case for one reason, will incorporate elements of the other. Adding a a blowhole, with a fan that has clear plastic blades, then mounting LEDs behind the fan so it glows would increase cooling and look neat.
Sometimes its even for convenience. People that go to LAN parties frequently need an easily transportable case. Adding a handle to the case for this purpose could be considered a case mod.
If a computer is not going to besubjected to heavy/hard usage, the cooling aspect is unneccessary. If its going to be shoved under a desk, the aesthetic reason is not neccessary. If its going to stay shoved under said desk, convenience of transport is not neccessary.
In short, case mods are done to fullfill a need. Whether its stable operation, artistic expression, or luggability.
Hope that answers your question.