I think if you coddle folks through Highschool (school from the ages of 15 to 18), then if they move on to post secondary education they wont be prepared at all. Already after having finished my first semester in University (I still have exams), although I did quite well, I also found that Highschool was mostly useless and didn't prepare me well at all for University. For people with dyslexia who would be coddled even moreso than regular students are in Highschool (again, school from the ages of 15 to 18; not sure what you call that), they will have a much greater chance of being totally screwed when they enter the work force or move onto post secondary education.
In a perfect world, or in countries where governments love to shove vast amounts of resources into social programs, special educational facilities for folks with dyslexia might be a good idea. Although blind people can go to public school and do fine, there are blind schools tailored towards practising learning techniques which would fall into the norms for blind people. A dyslexic educational facility could have specialized instructors which teach a different set of material in a format which attempts to maximize effectiveness to students with dyslexia. Such a school shouldn't be an embarrassment to attend. Dyslexia is unfortunate, and having a school which will focus on specialized learning techniques will make the best of a bad situation for people with dyslexia.
Going back to the fiscal consequences of having such educational institutions, in a perfect world maybe there could be an island called Dyslexia Island and everyone with dyslexia could learn how to brain bend there, and all the world powers could chip in and pay for it. Since this isn't a perfect world and that idea is utterly ridiculous, I think instead people with dyslexia who have parents that can afford to send them to specialized dyslexic schools probably already do that. In Canada such schools exist although if you live in a lowly populated region and have dyslexia and are not rich you're probably screwed. I know the government gives money to folks with dyslexia here but I doubt it's enough to be able to send your kid to live 1,700 kilometers away from you alone in the most populated area of the country.
Perhaps in England where you have such a great population concentrated on a small plot of land (or in other highly populous regions) it might be more practical and less expensive to have a government funded educational facility that could reach out to as many dyslexic students as possible.
tldr; the objective for dealing with students suffering from dyslexia or other mental or often physical problems should be to attempt to prepare them to enter the workplace and to be as successful in the work place as possible. Giving time extensions probably hurts them more than it helps them later on in life.
Not based only on their IQ, no. There could be many reasons why you score low on an IQ test. If the reason was a specific illness then the argument would be different.
When it comes to math more time does equal better marks in a lot of circumstances. Just the other day I had a quiz where the last question was a seven digit number and we had to determine if it was divisible by 9 (no calculators clearly). If you knew about casting out nines it's clearly a two second answer, but if you didn't know about casting out nines and had enough time you could do some lovely long division, or you could easily discover a quick mathematical pattern whilst dividing numbers by 9, apply it and get the answer. The professor wanted to see if we remembered what he briefly mentioned about modular arithmetic using a divisor of (n-1) in a base n environment (which in base 10 just ends up being casting out nines), but if you had enough time you could just rip the question apart and get an answer in a lot of other ways.

















