I mostly agree, but I think they go farther with this than you think. I could be wrong of course.
There are game options you can customize to create a kind of custom mode and one of them is to auto-pick conversation options! I assume you can also let the game spend your stat points automatically again, if you so chose, as in previous ME games.
I assume Action Mode is just a preset that tailors these options to a purely action oriented experience. I.e. auto-picking conversation options, auto-spending stat points, perhaps other things like auto-mining planets for resources, depending on how they did it this time.
Things like getting to trigger your team's special skills manually are probably On in this mode too.
I'm fairly sure I read Story Mode lets you skip engagements, because I too thought it just handholds you through action sequences, but apparently it does more than that. I don't know how it works exactly, but for example Red Dead Redemption lets you skip parts of missions if you failed them too often. I had a bug where my carriage was stuck once and couldn't complete the mission, so the game let me skip one checkpoint ahead. Something like that is conceivable for Mass Effect 3 as well.
Seeing as they have auto-selectable conversation options in a frikking RPG (!) I wouldn't be surprised at all if they had something that dumbed down engagements even further, to the point of making them skippable.
The thing is, I don't think these modes just tweak the game a little. If you like Mass Effect but you have a preference for action or story these modes are not for you. You can set the difficulty lower if you want to breeze through action to get to the talky bits. You can hold your stick/mouse to the upper or lower left and click yourself through the meaningless subplot conversations with good or evil solutions so you can get to the shooty bits faster. Those are all things you can do in RPG Mode.
Action Mode is for people who HATE that the game is more than a sci-fi CoD! Story Mode is for people who HATE that the game is also a shooter!
Because these people exist, weird as it may sound...
I think these modes are now fairly radical attempts to get those fringe players to enjoy the game. ME2 already tried to get them on board, by getting rid of the inventory management at least, but those pesky conversations were still there and
boooored people...
And if you're already going this far now, to accommodate players who are looking for a pure sci-fi shooter experience, even though the game is an RPG, you might as well extend that philosphy in the other direction and get those playing who would be against the game otherwise on the principle that it's kind of like a shooter (at the risk of sounding sexist here: presumably annoyingly girly girls... The kind who dragged themselves through the horrible action sequences on easy mode just to soak up more of the rich subtext of the romance plots and ooze some of it back out by producing romantic Garrus-themed fanfiction...
).
