I work in data security and follow some data security news, images with data hidden by bluring and other image manipulation are “broken” all the time.
Digital filters in software work by taking the image data, doing some math on it and producing the modified image.
Unlike images that are shot out of focus in camera, with digitally blured images we know exactly the math formula the software used – and often we can reverse the formula and get the original image back (sometimes with some quality loss)
I have no idea what Picasa soft focus uses and I don’t know if it’s reversible, also I’m not going to analyze it, treat this answer as a general warning not as a review of Picasa’a soft focus filter’s security
Even if we can’t un-blur the image often it’s possible to recognize the blured person/object/text/whatever by bluring sections from other images and comparing them (because if we take two similar image and apply the same math to both we get two similar changed images).
So, your bluring method will stop the casual surfer but not anyone who really want to get the data, never use it to hide really sensitive data (especially not text or numbers), be careful and if you want to hide something just paint over it with a solid color (and check it’s also hidden in thumbnails, preview images, undo histories and such).