There's a few reasons why I think blog module would be better in contrib:
1. If you want a single user blog, you probably won't use blog module - you can post articles to your front page and be just fine without it. There's an install profile for single user blogs started by add1sun. Sensibly, it doesn't use blog module: http://drupal.org/project/single_user_blog
2. I heard anecdotal evidence recently that a user enabled blog module expecting their site to suddenly have a wysiwyg, trackbacks, freetagging, pathauto and the rest. This is understandable and doesn't help first impressions on Drupal when people install it.
3. 1+2 = a pretty unpleasant usability issue for people moving to Drupal from blogging apps.
4. 95% of what blog module does is provide a view. But it can't depend on views module (unless views gets into core, but that doesn't deal with 1-3).
5. The other 5% of the module is a bit of breadcrumb handling and hook_link() - quite nice, but not what people expect to see when they switch it on.
I use blog.module on one site which has multi-user blogs in addition to a bunch of other stuff, so it's certainly useful, I know other people use it as well. But it'd be more useful if I could configure which node types appear in user blogs, add arguments to the views for things like date browsing and the rest. Which means an even smaller module providing a views plugin imo.
If we move it to contrib, I'd suggest a rename to 'multi-user blog' or similar, to make it clear what it does. Also someone would have to volunteer to maintain it. If there's massive opposition to moving it to contrib, I'd still suggest renaming it to multi-user blog for usability's sake.
Here's a patch.