History, reason for and implications of the 2 modes of a modern microprocessor?
The history of this started with timesharing, and the purpose was to isolate user processes from each other.

When there is more than one independent user on a machine, it is to each user's advantage to take as much of the resources of the machine as possible while leaving the others with nothing.  Without some kind of hardware protection, once a user got the CPU he could keep it forever.

This was dealt with by having different modes, sometimes called rings or privelege levels.  User processes run at the lowest privelege and can not physically take over the machine.  This works in conjunction with protections for areas of memory also based on the privilege level.

In the most basic form, you only need two privilege levels: user and OS.  Historically there have been machines that had more.  Four seemed to be a popular number for a while.  However, operating systems rarely made much use of more than two privelege levels.

Microcontrollers and early microporocessors don't have privelege levels because they are not intended for applications with hostile competing processes.