>It severely limits how many filters that can exist within the plugin
The limits are 30,000 static rules and 30,000 dynamic rules. Running tens of thousands of regexs for each request can lead to a performance impact. Allowing for even higher limits may result in people having a worse experience from the browser becoming slower. The API was designed such that these limits can be increased in the future as available computation and user needs change over time. Getting extension developers to design their extensions in a way where they have to think about not slowing down the browser too much I think is a good thing and I would not call these current limits severe.
>also prevents plugins from updating block lists themselves
declarativeNetRequest lets rules be added and removed dynamically by the extension.
>forces those updated lists to go through the plugin store
The Chrome team has said that configuration can be updated outside of a store update. What the Chrome web store does not want are extensions that download and run code. This policy does not related to mv3.