"Modular" is the wave of the future. Everything sooner or later is going that way. The Army is just getting ahead of things with this program, since based on past history, they'll be keeping the Sig for more than 30 years.
Modular concept saves a great deal of money on the big scale of things. It's not really going to be visibly much different for the user, but at higher levels of logistics, it has the potential to save millions.
Maintaining two separate guns, with completely different parts, mags, accessories, publications, training, etc. is pretty stupid frankly. Choosing any new design which can meet both standard and compact will save millions just from being a single platform.
Usually, if a legacy pistol broke, it had to be evacuated to higher maintenance. Despite what many imagine, the arms room isn't some master gunsmith shop. It's mainly a supply function. The modular pieces will now allow much more repair at the unit level. Something breaks, you swap the module out. The broken module is the only thing that has to go up to repair. The weapon is available for a greater amount of time, because it's not spending it's life travelling between the unit and 3rd shop. It's not at 3rd shop being repaired. It's ready at the unit, instead of broken and waiting to be fixed.
A modular system also has the potential to save at the depot level. You no longer have to store two different pistols for the contingency of needed one or the other. If you have 1000 M9's and need 1000 M11's, currently the Army has to buy 1000 M11's and store the 1000 M9's. With a modular system, the Army only has to buy the conversion parts for the full-size guns to reconfigure to compact. The parts that come off the full-size guns are then put back into the system as spare parts. You store nothing. This is where there is a potential for a great deal of savings.
There's a future possible potential of making it VERY easy to retrofit the sidearms as advances, changes, and improvements are made. If they get come out with an improved trigger, they simply send the modules out to the units and they swap them out. You no longer have to send all the hand guns in for the MWO, like the Army had to do with the M9 when it went to the big head hammer pin (AKA "FS"). The module makes all of this possible.
The way the Army is utilizing "modular" and the way Sig markets it to civilians are two different things. It would be a mistake to think that the Army is going to use "modular" in the same way a civilian would. The feature is indeed the same, but the advantage and benifit is completely different, and how the modules are used will be completely different.
The Army has already stated that it will not be replacing the M16/M4 unless it's with something truly modular for the same logistics reasons.
The Army wanted modular for some very good reasons peculiar to the Army, and they bought the one that met their requirements.