I like the idea of an automatic update function!
The software would be quite straightforward, the issue here is maintaining a repository; there is a lot of sloppy extension code out there, some of it outright insecure, and we don't really want the hassle of keeping track of it all and checking it's all sane.
The whole thing could be handled like Mozilla handles extensions; no central code repository, and the user (administrator) would have to confirm each update.
The problem with this, of course, is that every extension would have to provide sort of a CurrentVersion feed. However, most still-maintained extensions would probably quickly provide that once this auto-updater has been established.
-- F.