You have two options:
1) You can use the AIR File class.
2) You can run some ExtendScript code to read the file.
Oh duh. I didn't even realize that these extensions are AIR apps aren't they? So, of course, the AIR File class is perfect. Thanks.
They're not *quite* Air apps. They run under an environment based on Air that's designed for integration with the Suite host applications. You will find that there are some issues; such as, encrypted locals store do not work properly. But for the most part, if it works in Air, it should work in an extension.