Modernism (the philosophy) was declared and defined by Pope St. Pius X as "the synthesis of all heresies". It focuses on the ability of man to create or determine his own morality independent of the ancient Tradition of the Church. It is considered especially pernicious because, in modern society, is it more like the air we breathe than anything we actively can reject. We are a consumer-driven, democratic society; these two elements are diametrically opposed to historical Christendom, which is a humble-receiver (sorry, can't think of a better phrase) and theocratic society, at least within each human soul.
Another word for the philosophy of Modernism is relativism, specifically moral relativism. Contraception may be right for you and wrong for me. Ditto homosexual acts, abortion, etc. It basically makes of any moral code a kind of icky goo that becomes whatever you want it to be.
Atheism and skepticism are the natural children of Modernism. If I can create my own morality, then there is no God, or at the very least it is highly unlikely that there is one.