I have never understood this and everyone who has given me a reason, more or less just sounds like paranoia.
Your license plate is seen by hundreds of people a week (for most people). So if it's up on the internet, whats the difference? Are you worried that some creep will find out where you live if they can run your plate through the DMV system and come and kill you in the night? Somebody who sees your plate at the grocery store parking lot could do the same thing.
Can you even run peoples license plates? I wouldn't even know how to. That's why I think it's a little ridiculous to get all paranoid about blurring out your plates online.
I just say this because I saw somebody on another forum get flamed for leaving the plates on the car he was helping sell for an old lady. The car was in Texas and he told them that the plates have to stay with the car, because that's how it is in Texas. Then they all gave him E36 M3 over not blurring the plates out.