Its a powerful effect, but the problem is Blur requires your concentration as well as an action to set up. So by using blur your denying yourself the ability to maintain concentration on stuff like Haste, Bless, Shadowblade or whatever, as well as your first round of damage. So the cost of using it in combat is steep. Beyond that, there are very good non-concentration defensive spells that require an action, like Mirror Image or Armor of Agathys you could also choose to use. So, the thing isn't that Blur is bad, it just has a higher opportunity cost than similarly powerful defensive spells.