Well, let’s think this through. We’ve seen gems in Equestria found in common dirt and rock. They’re apparently a renewable resource, otherwise the dragons would’ve eaten them up long ago. Therefore, they must be organic in a sense–growing in the earth.

Obviously, this is magic at work. Presumably, there’s some kind of earth magic flowing through the ground in Equestria, and where it becomes concentrated, the common rock and dirt transforms into beautiful gemstone (which is why the gems are already cut and polished when ponies dig them up–they grow that way).

So what happens when a dragon like Spike eats gems? Well, if they contain absorbed magical energy, obviously digesting them releases the energy into his dragon body, providing him some kind of nutritional benefit. But what happens to the digested gemstone? Its magic extracted, it obviously reverts to the common dirt or rock it came from, probably forming a clay-like waste.

However, Spike’s internal body temperature has to be a couple thousand degrees, otherwise he wouldn’t be able to surive swimming in lava. That means whatever goes through his digestive system is put through a furnace hot enough to fire any clay.

In short, Spike shits bricks.