This seems like it applies the filter to the entire element (including its children), which would not give the same effect as blur.js without some complicated absolute-positioning trickery.
.blur {
background-image: url('data:image/xml+svg;utf8,
<svg xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink">
<defs>
<filter id="f1">
<feComponentTransfer>
<feFuncR type="table" tableValues="0.5 1"/>
<feFuncG type="table" tableValues="0.5 1"/>
<feFuncB type="table" tableValues="0.5 1"/>
</feComponentTransfer>
<feGaussianBlur stdDeviation="5" />
</filter>
</defs>
<image x="0" y="0" width="300" height="80"
xlink:href="http://background.png"
filter="url(#f1)" />
</svg>
');
}
You can off course generate all that in JS and parametrize it.
It should work in Chrome, but won't in IE9. No idea for other browsers.