Dual-encoder models have demonstrated significant success in dense retrieval tasks for open-domain question answering that mostly involves zero-shot and few-shot scenarios. However, their performance in many-shot retrieval problems where training data is abundant, such as extreme multi-label classification (XMC), remains under-explored. Existing empirical evidence suggests that, for such problems, the dual-encoder method's accuracies lag behind the performance of state-of-the-art (SOTA) extreme classification methods that grow the number of learnable parameters linearly with the number of classes. As a result, some recent extreme classification techniques use a combination of dual-encoders and a learnable classification head for each class to excel on these tasks. In this paper, we investigate the potential of "pure" DE models in XMC tasks. Our findings reveal that when trained correctly standard dual-encoders can match or outperform SOTA extreme classification methods by up to 2% at Precision@1 even on the largest XMC datasets while being 20x smaller in terms of the number of trainable parameters. We further propose a differentiable topk error-based loss function, which can be used to specifically optimize for Recall@k metrics. We include our PyTorch implementation along with other resources for reproducing the results in the supplementary material.