There a limit on the amount of stats you can gain for magical extracts. That limit is 10 million stats. You can get magical extracts by capturing monsters, interrogating them, and extracting their essence. You can do this early, mid, or deep post game.
The capture monster squad is essential to capturing monsters. Try to raise the level of the squad as soon as possible. At capture level 3, you can capture a 3x3 block of monsters.
Try to work towards a few goals at the same time. For example, you can capture monsters as you level up an item in the item world. Capturing all of the enemies on the board will advance to the next level and provide a good source of monsters to interrogate and extract.
I have Seraphina as the leader of my interrogation squad. I used threaten for her interrogation method. It's pretty effective, but experiment with different characters to see how fast you can get them to surrender.
After you interrogated a few monsters and reduced their SP to 0. You can recruit them or extract that powers. If you don't want to recruit them, extract them. That's a better option than letting them go.
Extract Item Limit
As you can see below. The limit for a magic extract is 10 million - 1. A character can only gain 10 milllion stats total from a Magic Extract. You can give a character two magic extracts with the stats below. The character will receive 10 million stats and not 20 million - 2. Beware of this limit and don't waste your extract.
Best Place to Farm
On Carnage mode, the board of Double Fake is where you should go. There's a 100+ Asagi's there. Using the Sage's Land Decimator skill can make quick work of many enemies.
See it in Action
Will They Nerf This?
I believe the answer is probably not. This is a core component of the game. This feature is a great alternative to Disgaea games of the past. Using the Puppy paw stick and a reset you could duplicate pretty much any item. However, you didn't have a lot of progress to show using this technique. With this method, you are rewarded for playing but have a sensible cap in place.