I think the main difference is that GDNative only had access to Godot's scripting API, so it could only manipulate the same stuff that GDScript or C# already could. So in 3.x, if you wanted to manipulate engine internals, you had to "engine extensions" which had to be compiled with the engine itself. But with GDExtension I think you're supposed to be able to do _everything_ that "engine extensions" could do, but without having to re-compile Godot itself.