When an engine is designed, the engineers calculate the precise dimensions of each component to result in a motor that will perform as-planned, in terms of horsepower and torque produced, balance, reliability, efficiency, etc. The design specifications represent what would be their ideal engine.
But engines are mass-produced in the real world, with parts that have to be manufactured inexpensively, and the engines are quickly thrown together by human or robotic hands on an assembly line. The 'bean counters' and the engineers are in conflict here: The bean counting accountants don't want to discard any parts simply because they're a thousandth of an inch (or two or three) larger or smaller than they should be. They certainly don't want to pay for extra machining time to bring deviant parts up to spec.
The engineer, on the other hand, would prefer that any part that doesn't meet his precise specifications be rejected, so that it does not impair the function of the engine.
Factory-built engines represent a compromise: parts with measurements that are within a certain tolerated range are deemed "acceptable". It doesn't matter if many of the parts for a particular motor are close to the rejection limit -- as long as they are within the range, they'll be used. Sometimes -- if you're lucky -- the errors will partly cancel themselves out: for example, if a piston that's a little on the large side ends up in a bore that's also a little on the big side, that's a good match! But usually, the errors "stack up" so a smaller piston will end up in a big bore, a slightly-oversize crank journal may get a smaller bearing, which would result in an overly tight fit, or vice-versa. So, on occasion, even though all the individual parts are within specifications, the resulting motor can perform relatively poorly. And factors like these are responsible for a wide range in the performance levels of supposedly-identical cars straight from the factory.
In one study carried out more than 20 years ago, 80 percent of Camaros performed approximately as advertised, 15 percent were significantly slower than claimed, and 5 percent performed better than the published specifications. These variations don't frequently concern the manufacturer or the buyer, since most buyers never subject their vehicles to track testing or push the redline of their engines.
When an engine is blueprinted, each and every part is measured to an extreme level of precision. Parts that don't match these precise demands are either machined to meet the exact specification or to perfectly match the components to which they pair, or they're discarded.
Camshafts are degreed to ensure the valve timing is as-intended by the camshaft designer, not just hit or miss timing that results from machining inaccuracies of the cam or timing gear. Bearing clearances are finessed to the precise dimension that will provide optimum performance for certain operation parameters. Piston ring gaps are set at the exact specification. Cylinder bores are honed to provide the ideal clearance between their walls and the pistons. And much more.
"Balancing" is another aspect of blueprinting, in which components of the reciprocating assembly are machined so that each connecting rod or piston has the same exact weight as every other, then the crankshaft is carefully machined to spin as smoothly as possible with the exact weight of each piston/rod assembly.
If all those Camaros had been blueprinted, they would all have performed at least as well as the factory claimed performance values and their performances would have fallen within a much tighter range. Furthermore, those engines would have been better able to tolerate sustained operation at the high end of their intended RPM range.
'Blueprinting' an engine is the practice of precisely adhering to the designing engineer's blueprint specifications.
So, why don't the factories do this? Why don't engine remanufacturers do this? Why don't most volume engine rebuilders do this?
The answer is simple: It costs too much. It takes a lot of time by a skilled engine builder to correctly measure and adjust each component, and such precision isn't needed in a production car.
So, why do car enthusiasts want a blueprinted engine? Because they crave bullet-proof performance and proven power over poor reliability and hit-or-miss performance.