Complex sentence: Playing what "sounded good" violated the established "ethos" of modes that the Greeks had developed by the time of Plato: a complex system of relating certain emotional and spiritual characteristics to certain modes (scales).
Split into simpler sentences: Playing what "sounded good" violated the proper use of the established "ethos" of modes that had developed by the time of Plato. That is, the Greeks had developed a complex system of relating particular emotional and spiritual characteristics to certain modes (scales).