Rated 1 out of 5 stars

I tried resetting my api_key and pasting it into the addon settings, but unfortunately clicking TEST still produces the same exact error message.

Hasn't worked for quite a while now. I've double- and triple-checked that my API key is correct, but I still get an error every time I try to use this addon:"Error while fetching short url information. Status code:500; Status text: INVALID_LOGIN"

This review is for a previous version of the add-on (0.83.1-signed). 

It shouldn't be so difficult

Sorry to hear the problems you are facing. A lot of people are using this without problems. Here are some steps which will help you setup the addon correctly.
1. Go to Firefox-> Addons -> Shorten URL (Bit.ly); click Options button
2. Get your username and api_key from : https://bitly.com/a/your_api_key
3. Paste the username and api_key exactly as they appear in the Addon Options screen and click "Test" button available below the api_key text box

This will immediately confirm if the api_key is valid. If this returns a failure, try resetting the api_key from https://bitly.com/a/settings/advanced - see towards the bottom of the page.
After this you will have to copy the new api_key to options and click "Test" button again.

Hope this resolves your issue.