The restriction
Non-Muslims may not enter Mecca. Road signs on the approaches direct non-Muslim traffic away, and checkpoints enforce it.
This is Saudi law, and Saudi authorities ground it in the Quran, at 9:28, which bars the idolaters from approaching the sacred mosque. Whether that verse, addressed to the polytheists of seventh-century Arabia, supports a general exclusion of Christians, Jews and everyone else has been argued among jurists rather than settled, and the historical practice was not always as absolute as the modern rule. What is not in doubt is the rule as it now stands, which is comprehensive and enforced. Medina is closed on the same basis.
The practical consequence for scholarship is real: the two holiest sites in Islam cannot be studied on the ground by non-Muslim archaeologists or historians, and the documentation of what has been demolished there depends heavily on Muslim scholars, many of them working outside the country.
The expansions
The Saudi state has enlarged the Grand Mosque repeatedly since the 1950s. The mosque now accommodates well over a million worshippers at once, and the Hajj brings roughly two million pilgrims a year, up from a few tens of thousands a century ago. Managing that many people in a confined valley over a few days is a genuine and unforgiving engineering problem, and the expansion is a response to it rather than a vanity.
The criticism is about what the expansion has cost. Historians and preservationists, including Saudi ones, argue that the large majority of Mecca's Ottoman and early Islamic built fabric has been demolished, and that structures with direct associations to the Prophet's lifetime have gone with it. The Ajyad fortress, an eighteenth-century Ottoman citadel, was levelled in 2002 to make room for the Abraj Al Bait complex, a hotel and shopping tower that now stands directly over the mosque and dwarfs it. Turkey protested formally at the time.
The religious argument runs underneath the planning one. The Saudi religious establishment's hostility to veneration of place, the same position that flattened Jannat al-Baqi, means that a building associated with the Prophet's family is not, in that view, something whose loss should be mourned, because mourning it is the beginning of the problem. Critics reply that this reasoning has been extremely convenient for a construction industry.
1979
On 20 November 1979 several hundred armed men led by Juhayman al-Utaybi seized the Grand Mosque and declared one of their number, Muhammad al-Qahtani, to be the Mahdi. They accused the Saudi monarchy of corruption and of betraying Islam.
The siege lasted a fortnight and ended with French assistance in the form of gas and technical advice. Official figures put the dead at a few hundred across militants, security forces and pilgrims; contemporary diplomats believed the true number higher. Surviving captured militants were executed in January 1980.
The consequence outlasted the event. The Saudi response was not to loosen but to tighten, ceding ground to the religious establishment on public conduct, education and the funding of religious activity abroad, in order to remove the charge of laxity that the rebels had made. The 1979 seizure is one of the events historians point to when accounting for the direction the following decades took.