Taking the sub-classing approach vs. extension methods requires a couple of things to be true
- The type must be extendable (not-sealed)
- All places the type is created must support a factory pattern of sorts or the other code will just create the base type.
Adding an extension method requires really nothing other than using a C# 3.0+ compiler.
But most importantly, an inheritance hierarchy should represent an is-a relationship. I don't feel that adding 1 or 2 new methods / behaviors to a class truly expressing this type of relationship. It is instead augmenting existing behavior. A wrapper class or extension method much better fits the scenario.