How to setup Email alerts for Reporting jobs when it fails?
You are correct that is the best way for individual server. 

Sample code for notification when a job fail.

USE [msdb]
GO
EXEC msdb.dbo.sp_update_job @jobname=N'test', 
        @notify_level_email=2, 
        @notify_level_netsend=2, 
        @notify_level_page=2, 
        @notify_email_operator_name=N'sysadmin'
GO


You can send email for success/failure or both.


  0 Never
  
  1 On success
  
  2 On failure
  
  3 Always


Books online has details.

There are large shops where instead of setting up notification for each SQL Agent jobs, all failed jobs will be collected at xx minute interval and send one email/raise ticket in the form of a report.