Is it inappropriate for an author to copy and paste from his/her original paper in an extension paper?
The answer depends on the relationship between the papers, and I'm not sure which applies based on the information in your question.  In computer science, at least, there are two general cases:


The extension paper is the "extended journal version" of a previously published short-form work such as a conference paper, workshop paper, or extended abstract.  In this case, the rule of thumb is typically at least 30% new material.  The extended paper will often contain large chunks verbatim, as it is expected to supersede the original paper, rather than existing as a separate work.  
The extension paper is a separate work: in this case, extensive reuse of material is self-plagiarism.  Two exceptions: first, related work, methods, and definitional material may often be reused as long as it is appropriate to do so---the material should be appropriately customized to fit the new environment.  If the author would just be paraphrasing for the sake of paraphrasing, though, it's not necessary.  Second, introductory material may be partially shared, though it should be more heavily customized for the new context.


In all cases except for minor reuse of related work material, the extension paper must declare a clear and explicit relationship with the prior paper.

Note that many other fields do not have the notion of a "journal version" and thus have much stricter standards.