As others point out, they want to combat malware. But they've botched the process and particularly the timeframe quite badly; they should have started by

1. Fixing the extension "code review" process, which is a mess. Make it be actually automatic 99% of the time and not a big hassle.

2. Implementing non-mandatory signing a long time ago and let that run for at least a year before making it mandatory. (The initial announcement that extension signing was going to happen was Feb 10 2015.)

3. Waiting for at least half a year after making signing mandatory to start even announcing "we will change the API and severely break all non-trivial extensions in the near future".

Right now, I think Firefox has set themselves up to decimate the number of extensions, by telling extension devs they have a mountain of work ahead of them for very little benefit. I can't imagine it will do anything but further reduce the number of users. Not sure what will come off it in the end. As a pentadactyl addict, I'm worried that I'll be on the next LTS release (without signing) for years to come. Either that, or we'll see a fork.