I was doing everything quite normally, really. I've used blur before.
But I also couldn't drag'n'drop materials on layers.
It's all working now after a close / re-open.
I guess that's part of the V5 fun.
I also have no drag & drop to the layers window in the may 27 build, and a reboot does not fix it. I would not be surprised by things like this, since the layers window lives in a part of Rhino that is under very heavy development right now.