I literally found a definition a lot like yours in my literal dictionary. I am sort of baffled at your comment because that sentence seems to be an accurate description of the situation I described in my analogy. Let me

A) I and my colleagues illegally broke into your thing ("harm you and your property"),

B) and you had better hire me to fix your thing ("give them money"), or

C) we'll probably do it again next time ("threaten").

I'm not sure what the source of our disagreement is.

I disagree that your fire department remark from above is a correct way of thinking about the situation, because the fire department does not start fires, nor do they charge for leaflets. What makes it seem like extortion is not primarily that geohot is offering to secure their console. It's that he's offering to be paid to do so in the next breath after helping to exploit their console.