I would say it is safe to make them not case sensitive. The main reasoning is that file extensions in Windows are not case sensitive. That might be different on unix/mac.
I think the more important question to ask is, is there any reason why someone would upload one file, and another one with the same extension except the opposite case, and intend the file types to be different. I’ve never encountered such a scenario.
I think the main reasoning behind it is much simpler:
1. iPhone cameras save photos using .JPG
2. My Android’s camera saves photos using .jpg
Both are still camera photos, and so I think they should NOT be case sensitive.
Would it cause problems for people currently using the feature?
Maaaaaaybe, but I think it is far more likely that this would fix more problems than it causes.