If it's important that your extension not be hosted on the Web Store, Windows users can still install it as an unpacked extension and perform updates manually. But it's definitely designed to be much more of a pain.
My understanding is that you won't be able to sideload extensions locally anymore, unless you're using the dev channel.
Yes, this sucks big time.
[1] http://blog.chromium.org/2013/11/protecting-windows-users-fr...
The process is much more difficult(you have to actually drag it onto the extension page or open the downloaded file) and unlike in safari it won't automatically update so you need to design your own update system. You also lose the permissions systems when you do that.
I'm pretty sure that was the manual process before they actually disabled non-webstore extensions. Before they disabled them earlier this year, Chrome would download them in the background but refuse to install them with a message indicating that you could not install non-Web Store extensions unless you did that, but would allow you to install them by that means; what you have to do now is use the preferred method for development, which is unpacking the extension and adding it after turning on the developer mode -- which allows using unpacked extensions -- option in Chrome settings.)