I too get this error and When  I try to install a plugin in the
directory /usr/local/lib/eclipse/ from Eclipse Update manager I cant do
that and I get the following error Cant update because the Eclipse can't
create directory inside /usr/local/lib/eclipse/*

I had to do the following
sudo chmod 755 /usr/lib/eclipse
and I was able to do that but I am unable to figure out what the exact policy 
for File permissions should be so that other users may also use the plugins...

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"Could not create /usr/local/lib/eclipse/.eclipseextension" on startup
https://bugs.launchpad.net/bugs/81900
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