Plugin historically referred to NPAPI (Netscape Plugin API), and later PPAPI (Pepper Plugin API) which were used for Flash, Silverlight and such. This historical reason was what distinguished between plugin and extension. The practice still continues today with H264 and Widevine even though they no longer uses NPAPI/PPAPI.
I'm still bitterly sad that Widevine has almost ended up as part of the spec de facto. I always turn off DRM compatibility in FF, and wish the other browsers would give me the choice. For me, that battle has been lost but the war may yet be won. I hope that this move of extension standardisation is actually a net boon for the end user, and not another silent, slippery path like WV and HTML 5 DRM have been.
