Many times, how developers / (manager that think it is a great idea) design an application and how users, use an application do not intersect. I personally would not install an extension to my IDE without at least skimming the docs, checking the licence to see if I am going to have to subscribe or pay later, and checking reviews to ensure that it's a legit extension. I am certain, that there is a contingent of people that do, but as for developers, I would expect them to be a power users that knows better than to just click a yeah, sure install that button.

Honestly, if that where the only way to install extensions on VS Code it would probably be a deal breaker for me. I never install something because the application tells me I should. Especially in an ecosystem where anyone can provide a package. To me it would be akin to blindly adding an Node module, python module, jar or any other third party provided dependency to the custom software I am writing without first vetting it. I mean the licence for an extension, could very well state, that any software produce form the use of this extension, entitles the author of the extension a 10% royalty from said resulting software. That is a very real and valid licence, game engines, codecs, encoders use it all the time.