It's not only the extractor. The main problem is the expansion of the steel case inside the chamber. A decent Luger has a rimmed chamber that provides a good gas seal. This works great with brass cases, but steel tends to stick.
The solution for this is removal of the chamber ring inside the chamber by reaming it out.
Using brass cases is the easier solution, though
Any technical problems that early lugers have will be worse on stainless steel lugers (well, except for rust, maybe).