Military teaching, at least when I was directly involved in it, was that extending downwind is a big "no-no", for reasons already stated.
So what do you do?
I understand your point, but if someone is in front of you is going slowly or making a bigger circuit than you might, (or just too much traffic to fit in a normal-sized circuit), either you have to cut in (possibly dangerously close), extend, orbit, or perhaps make S-curves for spacing. Sometimes I reckon extending downwind is the safest option.