This is a problem with how poorly extension permissions are handled by the browsers. There needs to be a way to gracefully ask a user for permanent (and configurable) extended permissions without it being an earth shattering event.
My experience: I have a moderately popular extension that initially only supported a couple sites so I set the permissions accordingly. I would extend permissions every time I added support for another site. However, with each permission increase my extension gets completely disabled for every user with a very scary warning that suggests something nefarious is happening. With each permission update I would lose HALF of my users. My alternatives are activeTab (awful user experience) or just being greedy with my permissions. I went with the latter.
Doesn't sound overstated at all...