Another good example of a freemium browser extension is Grammarly. Browser extension certainly can be monetized in an ethical way. (Note: I never used Grammarly myself, just seen the many ads)
Per Grammarly's Privacy Policy, they collect a bunch of data, which includes "all text, documents, or other content or information uploaded, entered, or otherwise transmitted by you in connection with your use of Grammarly’s Services and/or Software. This would include, for example, text you write while using a Grammarly product, such as the browser extension or the mobile keyboard".
There's also:
"You can remove your Personal Data from Grammarly at any time by deleting your account as described above. However, we may keep some of your Personal Data for as long as reasonably necessary for our legitimate business interests"
There's also:
"You can remove your Personal Data from Grammarly at any time by deleting your account as described above. However, we may keep some of your Personal Data for as long as reasonably necessary for our legitimate business interests"