Why not offer an option to try it out in the browser(with same GUI), and if they want security tell them to install it(and verify)? It would be just a bit harder than installing the extension.

BTW:there's another use case for extension based encryption: As the backbone for private messaging for various sites(which requires integration with the browser) , for example reddit.

private messages in reddit are :

(a)viewable to sniffers due to http usage

(b)can be viewed by reddit staff

(c)can be viewed by dragnet and targeted surveillance

An extension would definetly reduce attack scenarios, and has a good viral marketing vector. In fact implement the right way i could see it being a very reliable way to making something like this popular.