I thought it was funny as that EA thought it necessary to put the blur on the horses when they pee!! That cracked me up. I do think they could have done a little better with that thought - as it is they look like they just let it run all down their legs. In RL they stretch out so they don't get it all over themselves!
Right! Like for real! Haha! And the blur is like huge! It's silly but if they think it's necessary then 
You're confusing necessity with tradition. Sim games have a long standing history of tradition and 'in-jokes' related to it. Two of the biggest are llamas and "reticulating splines."
Since SimCity was first released (that's the earliest I remember, although it may even go back farther), the sports team that came with the stadium that you put in your towns was "The Llamas." Why? Because it's an animal not typically associated with sports teams, and because it sounded a bit silly. Maxis' sim games were always a bit tongue in cheek. Llamas became an 'in-joke' in the franchise, and since The Sims was loosely based on the concept of SimCity, it carried over. Even now, the local sports team still bears the name (and it was used to identify the notification pop-ups as well), and it has become synonymous with Maxis created titles...despite the fact that you almost never see an actual llama in the game.
"Reticulating Splines" is another one that comes from SimCity. As the game would load, it would list notification of what the program was doing as it loads, and this was one such notification. This also became an 'in-joke,' since at the time nobody but Maxis and people with a background in either mathematics or computer graphics really knew what this meant (it basically means that it is assembling the polygons necessary to render the textures upon). This was carried over into The Sims as well, with the notification often being altered slightly to fit in with the theme of the particular expansion being used. I recently saw one such notification appear in relation to the new Pets expansion.
The pixelation of biological functions has become yet another 'in-joke' that is based on tradition, albeit with a limited audience. Honestly, there is nothing more going on when a Sim uses the bathroom than there is when a Sim is sitting on a dining room chair. But despite this, Maxis saw fit to pixelate the action anyways, most likely in a mock effort to bestow a measure of privacy and dignity to the Sims involved (after all:
you'd feel a bit self-concious yourself if there was someone you barely knew about watching you use the bathroom). While a lot of Simmers missed the joke, there are a few of us who saw it for what it was.
