Unfortunately Google's policy doesn't cause only malicious extensions to be removed from their web store. For instance, All Mangas Reader, a combined reader and management tool for online manga sites, was removed from the store for "copyright infringement", although it's the sites that are hosting the mangas doing the infringement and not the extension. Additionally, the copyright problem does not apply to all jurisdictions where the store is accessible. ChromedBird, a Twitter client extension, was also removed because Google didn't like that it contained the "chrome" string (at least this problem was easily alleviated by changing the name to SilverBird).

As long as it's still possible to install non-webstore extensions I'll learn to live with that restrictions as it's not an activity I perform often in the first place.