Perverse incentives being one, you make the extension for free, for the purpose of selling out later.

Project being maintained by a single dev being another, there needs to be incentive to keep the project going and not abondon or sell out.

I believe problem isn't the right word. I think OP is challenging your assumption that it's inherently freeware. There are methods for monetizing an extension and they're infrequently used or associated with a much larger experience (e.g. my BitWarden extension is critical for using BitWarden, but I pay for BitWarden's subscription elsewhere).