Everyone seems to agree you did the right thing, and I certainly won't argue with that. But there's a kind of generalization to the responses that I'd like to express (and receive) opinion on. The responses in some cases seem to equate towing with yanking or towing with recovery or recovery with yanking. So, that's my concern.
In the Ancient Times, there were no synthetic lines and we never had cables, either. We had chains. So, 'yanking' wasn't an option. People often tried it with chains, even some folks who were in the business and should have known better. My point here is that extraction and towing can both be safely done with virtually no yanking (even though I'll concede extraction might not be successfully done without a nice jerk). While I'll agree right up front that during a tow jerking can occur, it's something that can be avoided rather easily if the towed vehicle has adequate braking ability.
So...my Big Point is, I see little or no difference between the use of a winch extension line and the use of chain. The winch line is far stronger than most commonly-used chain, and will likely absorb some jerk better than chain. But, again, yanking is just ONE technique for recovery--it's just an option you don't have available to you using a winch line (or a chain). I'm NOT saying 'chain makes a great tow strap', I'm saying I think similar rules apply in using chain and winch line this way.
The comments above about not using the winch line this way make sense to me, but I guess I'd like to distinguish between use of a winch line on a winch and a winch line extension, used as the equivalent of a chain, and not attached in any way to the winch.
If I'm off-base here, let me have it. I'm only saying that yanking isn't always needed and isn't always that great an idea anyway. Where a pull for recovery or for a tow is sufficient, I don't seen how use of a winch line extension is any problem provided the driver of the tow vehicle understands how to maintain a jerk-free system.
I'm asserting that "never use a winch line as a tow line" is not a good, blanket statement. You need some qualification. Comments?