I think that Lua is a quirky and somewhat terrible programming language. I have limited experience with it so my opinion might be incorrect, but as a polyglot software engineer, it was one of the programming languages that I had the least fun using.
I am not sure about the decision for using Lua instead of C for modding. Native modding worked well for Minecraft for example, where mods are written in Java. It might be unfair comparing C to Java of course. But modders will always find a way to mod the game (Minecraft was reverse engineered). I am not sure if the effort is worth it. You lose static type checking too.
You have a lot more experience than I do, though.
You might be interested in this:
http://luajit.org/