The problem isn't security per se, it's compatibility. Exposing all the browser internals to extensions means that all the internals are part of the platform's public API and it's almost impossible to change anything. A lot of HN users will be like "that's fine, software should be finished, I don't want any more features", but things like performance and especially security require ongoing maintenance. The particular thing that killed off Firefox's old extension model was that it blocked migration to a multi-process architecture, which was clearly necessary even at the time and became even moreso when Spectre showed up a couple years later. "Warning cones and blood red messages" do not solve this because a vulnerable architecture exposes all users to exploitation, not just those who choose to use sketchy extensions.

(Also we know from long experience that "warning cones and blood red messages" don't in practice suffice to prevent end users from being exploited, but that's a separate issue.)