Why is this frowned upon by the Mods ( or in general )?
We frown upon any action that abuses SE systems, especially if it's done to accomplish a particular action that's not normally possible. Strategically placing a bounty to prevent a question from being closed is an example of that. Bounties preventing close votes is, to my knowledge, largely a side-effect intended to prevent bounty shenanigans and streamline the possible outcomes of a bounty being started. Protecting a question from being closed isn't the main goal and if we were to find that a bounty was started specifically to prevent a closure that would as I mentioned be frowned upon.
None of that applies to the question that prompted this discussion in chat and this meta post. I'm convinced that the bounty was placed for its intended purpose of renewing interest in an older question. But the question was already on 4 close votes and because the bounty blocked the final vote that several people apparently wanted to cast I removed it. In this case the normal 2-day delay to place bounties didn't prevent this because the question went through an initial close and reopen cycle and its value to the site was evidently contested. In those case flagging the question is appropriate though how we handle such a flag will depend on the circumstances. Bounties are not removed lightly.
Gnat's comment below summarised the inherent contradictory natures of a bounty and close votes well and this is likely the main reason why the block is still in place (emphasis mine):
bounty and closure have opposite goals, first is to attract answers while second is to prevent these. Allowing both would send a very confusing signal to readers that's why system is designed to avoid such a "clash". The specifics of how system does that - bounty blocks closure - seems to be based on a (fairly reasonable) expectation that such clashes are expected to be rare enough so that moderators can resolve matters in (rare) cases when closure is indeed the way to go