As a general experience it's 'good enough' on the iphone 5. It would of been cut otherwise. But for example if you compare starting and using any app on iOS 6 vs iOS 7, you'll find out that the exact same executable is far faster on iOS 6 than iOS 7.

They said at wwdc that the blur effect took a lot of 'optimization' work. You don't have a lot of control over how it works and in iOS 7 you had to hack it in by using a UIToolbar vs applying it to a UIView in iOS 8. If you have any view with a significant amount of the blur effect on screen, the animation speed will slow down considerably in the simulator.

They use the effect everywhere in iOS and I bet it does contribute to a decent chunk of performance reduction.