Joshua: What would your users say when the Open/Save dialogs no longer work as they expect them to? I can think of few apps where I wouldn't want care if shell extensions didn't work.
Kyle: If the shell was designed today, they might not realize that bad shell extensions would cause so many crashes, so they might not consider that it would be necessary. On the other hand, maybe they would have learned from IE plug-ins and put them in a different process.
BTW, why did they cache BSTRs to begin with? Since they're not all the same size, it seems like it wouldn't be a big win. I suppose the memory allocator overhead was more of an issue back when BSTRs were created.