iPad mini 2 here working fine. No severe sluggishness. Perfectly useable. But although I will admit that iOS 8 was snappier I'll take a minor hit in performance for iOS 9 features any day.
Yeah it has no place there, the blur is supposed to suggest that a overlay is actually overlaying content and that's exactly how iOS uses it except for the app switcher which uses it like a depth of field effect where the furthest visible app is out of focus.