why do people hack?

Main reason should be trolling. Other subjects fall into rage, envy, attention. They use to be deceived themselves because of external problems, unfairness, etc, so they're trying to compensate this stress by messing with other ppl, so they feel utterly superior and/or more intelligent.

In any case, hacking in multiplayer games is quite stupid and only hurts game's community.

Hacking devices or networks for security reasons (or for learning) is a good thing, and should be empowered.