Here’s a good article showing how much mischief a browser extension (Chrome in this case) can get up to:
Thing is that unless we check the code (and are able to understand it), we just never really know for any extension, or any software for that matter.
True, although things like that tiny window showing a truncated list of permissions is low hanging fruit. That could be a window that won’t let you proceed unless we’ve scrolled through them, like one of those license agreement windows.
Then there’s making permissions more fine-grained. If an app needs access to a specific thing in a some category of things, it shouldn’t necessarily have access to the entire category. System wide file system permission vs permission to write in “C:/SpecificDir”.