How are they ‘blocking developers’? There are many extensions already, with many more in current development.
You can’t expect Twitch to let you have a sandbox to run code on their platform without taking legal precautions to protect both themselves and their end users. You might not have any intent on doing anything malicious, or have any plans to monetise your extension, but unlike a 3rd party server which integrates with the Twitch API, extensions deliver content through Twitch’s own site and so they have a responsibility to perform certain checks and balances on who is using this.
Maybe they will streamline things in the future once they get an idea of how extensions are being used and where there might be issues. If you want to be on the bleeding edge of new features then you have to accept what goes along with that.