I think it is pretty obvious that Chrome isn't a reliable browser. They say manifest v3 is for security and every good lie is hidden in a thin veil of truth. Yes, there are badly behaving plugins and yes there are users that will fail. There always are and they need to be educated about computer usage.

There excuse for the limits of the API is a plain lie and neglect to mention that abusive plugins don't need to use the webrequest API for their intends. They used it because it was powerful but there are hundreds of alternatives spy on passwords, input or personal data in general.

Google tries to implement the same paternalism it pushed through on Android just like Apple did with iOS. This is a reason we don't have good mobile OS. Google is an ad company and their motivation here should be very clear.