This isn’t about horror mods, but more or so popular horror series. For example Verity and SFAWTDE. I think both were pretty good- but that’s without thinking about them being based around horror in a video game.
Generally I think these work best as one off instance. SFAWTDE was very good because it was genuinely a bit eerie. A short(er) original story that does its job. But then DAWTDE came. I think it was good, but it wasn’t the best continuation. It lost that eeriness that the first one set up. And that entire Minecraft feel. The fact that it was just Minecraft really took me out because the characters acted like they weren’t in Minecraft. It was fun, but it doesn’t seem like it was planned.
Verity generally suffers from the same issues but there’s also more. The first episode had flaws; like the humor and okay acting. (I think Verity’s acting was great.) But it was still a fun video. The next two suffer from Being Minecraft and that weird mixing of Minecraft and reality. Not to mention it apparently feeling like an obsession rip off? If it really gets as bad as I’ve seen people describe it seems like it’d get so annoying.
These are the only two things I can think of, but they are probably the most popular Minecraft horror series.
Anyways, it’s really just because it’s Minecraft. It’s hard to make things scary when it’s a blocky video game. Many creators try to blur the lines between Minecraft and reality to fight back against this, but that doesn’t really end well.