Why are they doing this? Because they want to envolve and don't be stuck with old things. However, if they did the transition in a good way by giving the developers time to adapt, that I don't know
Well, most extensions still break on every GNOME major version. Some are actively maintained and will be updated quickly-ish, others not.
IMO if a lot of the small extensions were just integrated into GNOME, some of them could be a single toggle somewhere in the settings. Like a clipboard manager or Launch New Instance, or Wallpaper Switcher.