The number of kernel extensions used by Apple is immense. I don't think they will be able to remove them from the OS anytime soon. Instead they will not support them and not sign them. Also, I would expect no further documentation so over time any use would be more difficult. But actually removing the kernel extension code would be a huge chore and there really isn't any reason to do so.
I don't think it's that unfeasible.
I mean, I get what you are saying. The main reason why monolithic kernels have failed is because interfacing with third-party hardware was a mess — you either had to bake a monstrously fat kernel that supports everything under the sun, or you used slow interfaces that absolutely killed performance. So as long as Macs support heterogenous hardware, kernel extensions are a necessity.
But Apple Silicon? It's an integrated system with a very limited selection of hardware components. You can absolutely bake all the essential drivers into the kernel, without any drawbacks. And you can still let the user have low-level interface to their storage systems, drivers, webcams and even custom extension boards via user-space drivers: those will offer "good enough" performance for most cases. Looking at the information found so far by low-level hackers, I have a strong suspicion that Apple Silicon is designed with high-performance user-space drivers in mind: they have very fast interrupts, which should in theory allow low-overhead communication between the driver and the kernel API.
So yeah, I do believe that couple of years down the road we won't have any third-party kernel extensions at all. Sounds like a logical thing to do and a natural direction, with Apple deprecating the kext APIs left and right. But of course, I might be mistaken. Time will tell.