Here's why I don't think it's extortion. Imagine you have a neighbor that hates bicycles. You agree to stop riding yours if she pays you $100,000. Is that extortion? Obviously not: you have the right to ride your bicycle regardless of whether or not your neighbor likes it, and you have the right to sell your professional services (not riding a bicycle, in this case) to whomever you like.

(Perhaps she wants to sell it to a like-minded buyer, and you're therefore devaluing the property. Too fucking bad, right?)

A problem that I could see the mugshot sites running into is that they imply guilt, when the mugshots were only for arrests. Intentionally misleading someone seems a lot like libel.