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At present, when communications with a gem repository fail, or the gem repository does not contain the expected information, the IDE appears to fail quietly leaving the user without any understanding as to why they aren't finding the expected gem updates or gems to install. The IDE should provide the user with a simple dialog indicating the failure.
It already does so. I've tried to simulate by by adding: :sources: - http://gems.non-exist1234.org to ~/.gemrc, so gem fetching fails, and Gem Manager pops up the dialog for me with the failure message from the underlaying gem tool. Could you better describe when the error dialog did not pop up for you?