That's probably because at this point in time there's no way to communicate the differences of files to the client. I'm sure the mod might actually be running on the server, but there's no way to send the information to the client. That's kind of the problem right now.
I came to the same conclusion and actually was thinking that before I tried to get it working, but it never hurts to try, right? Also the server log did show that the mod was loaded so you're right, it was running on the server.
Actually now that I tried that, it works. It's still a hassle for other players though.
edit: Scrap that. It looks it's working client-side only.