Deleting your prefs file causes a world of hurt:

1. Delete your prefs file ~/config/Brackets/brackets.json
2. Restart brackets.
   You are warned that the config file is missing.
3. Open the prefs file for editing from the debug menu
4. Quit brackets
   You are warned that "brackets failed to read config file and it will be opened on startup"

At some point I had an empty prefs file and could toggle spaces to tabs and it wouldn't update the empty file with the preferences change but I cannot seem to reproduce that at the moment.

IMHO we should just silently create the file with the default settings if it is missing. There's no need to tell the user and/or open the file for their review in that case.

The Failed to Read prefs warning is alarming to the user -- we just use the default settings in that case anyway, you just can't save changes. I would prefer some other affordance and skip the whole preferences corrupt warning on startup. Since we just use the defaults in that case, it may be worth while displaying any corrupt message until the user tries to change a preference. I'm not sure how difficult it is to make that distinction, though.

Brackets' edge is to get into the editor quickly and have less in your way. This dialog violates both of thoese treaties. Perhaps @larz0 can come up with an affordance for things this like a status bar indicator that the user can deal with when they get bored or lonely.