I'm confused though.

If the goal is to optimize for server bandwidth, wouldn't you still want to send the already-blurred photo? Surely that will be a smaller image size than the pre-blurred full res photo (while also reducing client-side CPU/OS requirements).

We don’t know the aspect ratio of the client window before-hand and on web, there are a lot of possibilities! So if any pre-blurred image is meant to peek out around the edges, those edge widths are dynamic. Otherwise, a low-res blurred image plus high-res non-blurred edges might be less bandwidth if overhead is low enough.