Dreams are usually crisp and clear. While often strange, they're still easy to see as reality is (as long as you've got your glasses on for the latter, if you're like me). If the Fade was blurry, it'd be too obvious, I think. The strange constructs we see in it should be enough to tell the person in the Fade that something is amiss/this isn't reality, or in cases where you're physically there, it isn't the normal realm. Dreams often have a subtlety of wrongness about them, and while the Fade definitely needs work on getting that down, they've done a decent enough job so far.
I think they did best in Origins and Awakening in terms of how the levels looked in that it twisted real places in game, but it got the point across, and the blur effect was ultimately unneeded. DA2 did well, too, as it also reflected reality in its strange way. Still had that nuisance of a blur effect, though. I never play the Templar storyline, so I don't know what its Fade is like, but I do know I didn't care for Adamant's Fade. Maybe the Nightmare is too all-encompassing for its domain to reflect the physical parts of reality the way we've seen so far.
Slightly unrelated, but was anyone else disappointed that the opening portion of Origins' Fade sequence wasn't related to the player character's origin? Duncan just felt like a lazy cop-out to me. I think something the player character would have actual emotion attachment to would have been more effective, as demons try to trip you up by playing your emotions. Realistically, the player character is not going to be attached to Duncan, so what reason would anyone but Alistair have to fall for his tricks?