No, There is still a difference in persistent and temporary cookies. This issue relates to the Forms Authentication cookie, a cookie created by the asp.net framework.
You can make a Forms Auth cookie persistent which DotNetNuke does if the remember me checkbox is checked. The expiration of the persistent cookie is determined by the timeout value.
It's not related to the Session timeout in any way that I know of, unless you count that when you have a persistent cookie and your session times out the cookie will be there to re-authorize you.
So it's not really that the session is being extended, it's just that the cookie being on someones machine for a longer length of time without expiring poses a greater security risk than if it expired sooner.
Think of it this way. I own a very exclusive and private night club, and I want to allow my customers to come back and not have to go through a lengthy process to get in if they have already proven themselves worthy to enter. So I issue them an exclusive ID card to be presented when they return. I would then probably want to make sure that the card expired in less than 50 years so that I wouldn't have 100's of thousands of them floating around and being traded on the black market (hey, it's a really cool club).
Now in ASP.Net 2.0 that timeout is minimized to almost nothing "out of the box". So it is then up to the developer/owner of the application to increase the risk to a longer time if desired.
DotNetNuke makes it 60 minutes by default, which really confuses a lot of people about the "remember me" functionallity since it will remember you, but only if you keep refreshing it's memory by showing yourself every 60 minutes.
Personally, I think DNN should default it to a week, but since I can change it myself, it is not that big a deal.