I'm seeing the exact same problem, on an up-to-date Ubuntu 16.10 amd64
installation. The only oddity to my configuration is that I'm running
the 4.9.6-040906-generic mainline kernel, because the stock Ubuntu
kernel has stability issues with the ASUS Zenbook UX501VW. Based upon
the original submitter's reported kernel, however, I doubt that's
significant to this bug.

For what it's worth, other activities which need to display the
authentication dialog (such as unlocking a SSH key) don't appear to be
encountering any difficulty.

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https://bugs.launchpad.net/bugs/1660100

Title:
  Unable to enable or disable repository in Software & Updates

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