What you describe is not extortion. There is no legal reason why the wife could not state that she would sue for alienation of affection if the woman continued her relationship with the husband, and there is potential for an alienation of affection lawsuit based upon any claim that the wife might still make that the breakup of the marriage was caused by the affair.

Also, an accusation of extortion or blackmail is not a civil cause of action, but is a crime -- something that you would report to the police for possible prosecution, so even if the wife weren't within her rights to have threatened a lawsuit the threat would not provide a basis for a counterclaim.