If it failed open, anyone unlucky enough to update their extensions could end up having a malicious version installed. It also would have taken longer to notice.
With this reduced threat model, it's easy to simply keep existing pre-installed extensions available, and disable updates. Your only problem is if a pre-installed extension is malicious or has a vulnerability, it will remain.
This is why a signature can also be accompanied by a trusted time stamp which can confirm that the signature was made while the certificate was valid.
This is the common way to sign all Windows software to avoid this exact kind of problem.
Yes, that implies this is a known and solved problem. It’s embarrassing for Mozilla to not have prepared for this.
Probably the correct behavior is to have some sort of semi-annoying popup when it expires, and then only a week later do the full blocking. You need to strike the right balance of making it annoying enough that it can't be ignored by everyone (otherwise you just have the exact same problem, just delayed a week) and that fear of it happening is a sufficient motivator to stop people lazily relying on the grace period, but also not too annoying that it makes a lot of people quit. You also want to avoid permission fatigue.