I think the problem is that people imbue game-world artifacts with value, when they shouldn't.
Absolutely, it is a friggin game.
The problem with the virtual world, is that it is hard to draw parallels to the real world, so people that don;t know how the virtual world works, can understand what is happening.
I guess the best parallel I could draw is if you did something to give a race horse an advantage, and sold the knowledge of which horse to bet on. Probably not even too close, but it is the best I can come up with.
The thing that is going to have to happen soon, is to decide whether virtual property is to be treated as real property. My vote is yes, or at least close enough that there are real-world consequences for screwing with things.
And yes, he was modifying the game to suit him. To do so, you have to introduce code that isn't in there. Just because he didn't have to break codes, doesn't make it not hacking.
http://www.webopedia.com/TERM/H/hack.html
(v) 1. To write program code.
2. To modify a program, often in an unauthorized manner, by changing the code itself.
1. Code that is written to provide extra functionality to an existing program.
2. An inelegant and usually temporary solution to a problem.