I then tried a poor man's calibration by putting a ruler at an angle and trying some different AF microadjustment settings ... the best I can figure it's best setting is about +12. Even then it's not as sharp as native but I expected to loose some sharpness with the extender.
I realize the "every lens is different" but doesn't that seem like a lot of adjustment? Am I better off trying to exchange it?
Not the best way to do that (see this thread
for a longer discussion of AFMA), but a +12 adjustment is not unreasonable. With my 5DII, the 70-200mm f/2.8L IS II is at -3, and when I add my 1.4x II it's +4.
Also what's everyone else's experience with the extenders? When it comes down to it I still wonder if I'm not getting an as good or better photo by just cropping the photos from the 70-200mm lens. Also not loosing the one stop of light.
Extenders are at their best when used with the supertele primes (300/2.8, 400/2.8, 500/4, etc.). They are not as good with zooms, although the 70-200mm II is arguably the best zoom lens available, any lens takes a hit on sharpness when used with an extender.
IMO, an extender is for occasional use only. If you need a certain focal length, get it. My 100-400mm, older design though it is, is optically better than my 70-200mm II with either the 1.4x or 2x extenders. I use an extender only in two situations - 1) I am traveling with the 5DII, and don't want to bring the 100-400mm and the 70-200mm II, and 2) I am using my 7D in the rain, and the 70-200mm II + TC is weather-sealed, whereas the 100-400mm is not.
Sharpness is still decent - here's a rainy-day shot with 2x extender (which delivers a bigger IQ hit than the 1.4x):
EOS 7D, EF 70-200mm f/2.8L
II IS USM + EF 2x II Extender @ 400mm, 1/160 s, f/5.6, ISO 3200