The plausible deniability reason is that Manifest V2 gave way too much power to extensions, which is true.
... except that we already execute remote JavaScript on our browsers constantly. And we do it, usually, unconsentually. Versus extensions, which are a deliberate thing you need to install.
That's what i find stupid of current browsers. When Firefox was first created by "stripping" all the bloat from Netscape navigator, the idea was that Extensions would allow end users to add optional functionality . It put the user in control of their browser experience.
There should be a browser that doesn't assume their users are stupid. I want to turn off CORS I want to be able to modify the DOM and inject whatever the heck I want.