If they wanted to, one would guess that browser-ish local apps based on stuff like Electron/node-webkit could probably figure out some way to limit extension permissions more granularly.
Sneak in a malicious browser extension that breaks the permissions sandbox, and you have hundreds of thousands to millions of users as an attack surface.
Make a malicious VSCode/IDE extension and maybe you hit some hundreds or thousands of devs, a couple of smaller companies, and probably can get on some infosec blogs...
Attackers just have to hit one dev with commit rights to an app or library that gets distributed to millions of users. Devs are multipliers.
Yeah and they suck now. We need a better security model where it's still possible to do powerful stuff on the whole machine (it's MY computer after all) without compromises.
That's not possible. If you can do powerful stuff on the whole machine by definition you have no security. Security is always a question of where you create a perimeter. You can hand someone a well defined box in which they can do what they want, you can give someone broader access with fewer permissions, but whether vertically or horizontally to have security is to exercise control and limit an attack surface.
That's even implicit in the statement that it's YOUR computer. The justification being that there's a dividing line between your computer and other computers. If you'd be part of of a network, that logic ceases to hold. Same when it comes to components on your machine.