Having read this thread and being an ATV owner... Can't the axle vent be replaced with a barb-fitting and tubing be ran up the back of the cab for all axles and thereby eliminating the water intrusion??? Just a thought.
The axle housing is sealed off with breather valves, which will keep water from entering if working perfectly.
The thread is standard 1/8 NPT and can easily be fitted with an extension as you suggest or with a pressurized air line. However, the biggest problem
with the axles (as with commercial vehicles) IMHO, is the seal that keeps water from entering the bearing housing and there is no way to know after submersion if it did or not except for actually removing the hub and do a visual.
As mentioned above some vehicles have pressurized brake/wheel bearing housings to make the unit waterproof...