> I've visited the site as the googlebot user agent and it is exactly the same as what non-logged in users see

.. except, of course, that the googlebot just reads the HTML. The CSS3 blur only causes problems when you try to read the site visually, via a browser.

> They also aren't doing any tricks to hide the full response in the HTML.

Yes, that's why the googlebot can read it.

I don't know why you're bothering to argue that this isn't cloaking. It most assuredly is.

  cloak
  verb
  conceal, hide, cover, veil, shroud, mask, obscure, cloud