I am maintaining an instance of DSS 2.3.X for the moment. I was wondering whether there was a way to send out an email notification or hooking up some form of alert when a scheduled job fails.
Sure, this feature is part of the "scenarios" in version 3. Scenarios have replaced scheduled jobs with many more features (reporting to various connectors, chaining of several steps, triggered build...)
This is a feature available from DSS v3.0 (and with automation licensing).
You could instead write a Python script/recipe that check regularly the status of last scheduled jobs via DSS REST API. Here is the documentation for v2.3: http://doc.dataiku.com/dss/2.3/api/public/index.html