Back in the 1990s, there wasn't much of a standard about how the operating system and those new-fangled wireless networking devices were supposed to interact. Because of that, the operating system needed to "talk" to every device in a "different language", so to speak. Often, that was even true for different variations of the same device. So people needed to develop separate drivers for each and every wireless networking device.

At some point, a developer named Jean Tourrilhes decided to develop an interface, an API. With that, the operating system could address any wireless networking device (or at least, many devices) in an uniform manner. The API would then handle how the specific device would like to be "talked to". This API was named Wireless Extensions:

It all started when I tried to install a Wavelan network on Linux computers. I was having a ISA and a PCMCIA versions of the Wavelan, and the two drivers were using totally different methods for the setup and collection of statistics (and in fact fairly incomplete...). (...) I decided to define a wireless API which would allow the user to manipulate any wireless networking device in a standard and uniform way.

So, if iwconfig tells you there are "no wireless extensions" for a specific device, it means that this specific device cannot be addressed via the Wireless Extensions API. This may be because the device isn't a wireless device, but a wire-bound device. This may be because the device is "virtual", like for example the loopback device. Or it may be because the wireless device in question isn't compatible with the Wireless Extensions API.

The Wireless Extensions API isn't being developed any more, but it's superseded by newer approaches. So maybe your wireless networking device isn't "covered" by the WE API, but will work with one of those newer technologies (and a different tool than iwconfig).