When installing an extension from the webstore fails because the extension doesn't parse, the error shown is simply "Invalid manifest".  We can display a more specific error message here, e.g. "Invalid manifest: malformed host permission "http-not-valid-url"".

The only downside would be if this is considered too technical to display to the average user.  On the other hand, at least this gives the user something to let the developer (or the store) know.

jawag@, do you have thoughts there?  If it sounds good to you, we should be able to make this in a chrome-side change.