If everybody gets extension, say a 2 hr test becomes 3 hrs, then eventually there will be someone who claims 3 hrs is the new normal time and still demand an extension over that.

It really depends on the perception of whether the goal of the extension is to give disabled students an edge over "normal" students or to give everyone a fair(not necessarily equal) opportunity to complete the test.

That's a great question, actually. Timing tests appears to arbitrarily punish students.