GAF mods are a prime example of the effects of the Stanford Prison Experiment (later fictionalized in the film, Das Experiment). You take a group of peons and split them in half. You make half guards and half prisoners, then leave them alone. Sooner or later the inner sadist is revealed, and the guards (mods) start abusing their powers.
They are worthless nobodies in real life, but they seize on the opportunity to inflict harm on others. The prisoners learn to accept the punishment. They show blind obedience to those who have no real authority over them.
http://en.wikipedia.org/wiki/Stanford_prison_experiment