I think this is really uncalled for to be honest, if hes made it to year 2, and went out to help his family, he has proven that hes capable of handling medical school, and going to help his family, however little credit most of you cold-hearted people here give him for that (this is not directed at the quote alone but alot of the posts trashing him with little logic behind it).
I don't think people here are really being that cold-hearted. From what the OP has said, the school tried to work with him to come up with a workable solution so he could both help his family and take Step 1, and he still didn't take the exam despite multiple extensions. I doubt the school would have granted the extensions without knowing why the OP needed them in the first place, and since med schools generally go above and beyond to keep students from failing (or being dismissed), I'm guessing the final date provided the OP a relatively reasonable amount of time to study and take Step 1 in the context of his situation.
To the OP, I agree with the others in that it's not a reasonable expectation to get through med school without feeling incompetent and embarrassed at times. Everyone goes through it; case in point, one of the next threads on here is titled something like, "Do you often feel bad about yourself?" But it does sound to me that you do have a particularly difficult time with anxiety (and self-defeating behavior). As it has gotten to the point that it is impacting your life to the point of threatening your career, you might benefit from a little help from a psychologist/psychiatrist. And, I suspect, that you're probably equally appalled at that suggestion, but you'd certainly not be the first nor the last student to need counseling. There's an intern at my school who sounds essentially like you in 3 years in terms of anxiety, and it was an absolute disaster...especially as initially everyone's response was to try to ignore it and NOT embarrass the intern. But eventually the program did step in and it's been much better...for both the intern and everyone else. IMHO, it's better to confront and deal with these issues sooner rather than later, and to do it on your own terms rather than having to have someone else force you.
I'd also take time to think about what really was behind your decision not to take Step 1 as well as your current plan about responding to the situation. To me, it sounds like someone who either subconsciously doesn't really want to go into medicine. I don't necessarily think that's really the case, which means that you have "other stuff" in the mix that needs to be dealt with before you can achieve your goals. If you do really, truly love medicine, I'd talk to your school again, get in touch with a counselor, and go for it.
I don't mean any of this at all to be harsh, it just sounds like you're in a very tough situation and wanted to add my opinion to the group...take what you want from it. I forget who it's by, but there's a great quote out there about what makes the difference between successful and unsuccessful people, and it's not that successful people don't also have fears, but rather that they do things despite the fear. Good luck!!