Tried that first but nothing happened. Didn't see the extra space after expanding the extent. I rescan and refreshed multiple time in Disk Management Tool on the Windows client. Even disconnected from target and reconnected in an attempt to refresh the volume size.
EDIT: OK...figured out the way it works. You can change the file extent size BUT, that size change is not dynamic to the iSCSI process. Meaning the iSCSI service needs to be stopped and restarted in the services page to see the change. This behavior is bad because stopping the global service would effective stop access to all other iSCSI clients being served disk. Not sure if this is something that can be changed in FreeNAS, so the changes to file extent can be dynamically recognized without affecting other connected clients.
EDIT: Is there somewhere a request for a feature can be made? I would not call this a bug, just a needed feature to be added or enhancement.