How you are throwing an exception in IPlugin?

I'm using the following code snippet and it works fine

var contact = context.Request.Target as CustomerContact;
 if (contact  == null) throw new NotSupportedException("Support create Contact only!");

The exact code looks very similar - more or less like

var result =  // API call
if (!result.Succeeded)
{
    throw new ApplicationException("This action cannot be performed"); 
}

In terms of effect, it works - change in Commerce DB is rollbacked and previous state of the user is preserved. However, I'd like the administrator to see something less scary than error 500 page... ;) 

You can simply return like 

if (!result.Succeeded)
{
    return; 
}

Ideally, it should be returned with the message. I'll do some experiments with my IPlugin and will let you know. 

I'm doing all form validation on the client-side.

As I said in the above reply, you can use return if your result is not Succeeded and it would not give 500 error to the user.

To show a user-friendly message...

I assume you have already generated Typed Business Foundation classes

You need to edit ContentFrame.aspx file to show a user-friendly error. 

You can use Js to get the message from BE & show or simply put it in session and get it in aspx file (sorry by webforms knowledge is a bit rusty) 

All the above seems like workarounds. @Quan probably know more about it.