Corbin, in a number of respects Blumlein stereo is a nearly ideal recording method, but in terms of the situations in which it can be used to best advantage, it's not a "universal" approach. You mentioned miking distance--let's look at what that issue means to a Blumlein setup.
One obvious effect which is true for every type of indoor setup, is that the farther you place the microphones from the sound sources, the less clear the recording will be. Sometimes reverberation sounds very good and sometimes it stinks; anything in between is possible, too, due to room acoustics. The type of music enters into it as well. It's a judgment call as I'm sure you know.
A second effect of miking distance is the effect on balance. When sound is coming from multiple places at once, the distance from those places to a central pair of microphones will vary. Sources at the center will be closest and therefore clearest, and to some extent also loudest. Some amount of this may be good or at least tolerable, but too much of it is definitely bad. You always have to back mikes off at least a certain distance so that they're not overwhelmed by whatever happens to be in the center.
In a Blumlein stereo recording you have two coincident figure-8 microphones. Each microphone has a front and a rear "lobe" of equal sensitivity and coverage angle, so with 90 degrees between the main axes of the mikes, there are four equal lobes evenly spaced around the microphone. But the front and rear lobes of each microphone are in opposite polarity from each other. So it is imperative not to pick up any direct sound in the rear lobes of either channel, since that will tend to cancel other direct sound that's being picked up in one or both of the front lobes and cause comb filtering effects. Good stereo imaging gives you another strong reason to avoid that situation.
The maximum angle that a Blumlein setup can cover, in terms of the angle which the stereo mike "sees" from itself to the farthest left direct sound source and to the farthest right direct sound source, is a total of 90 degrees, or 45 degrees each way from a forward-going center line. This is narrower than other stereo recording approaches give you, and unfortunately there's no possible way to increase it with figure-8s. You simply have to back off the mike until all direct sound sources fall into that 90-degree forward angle.
The thing is, since the front and back lobes of a figure-8 are equal in sensitivity, it is as sensitive to room sound coming from behind and to the side as it is to direct sound coming from in front. This is why a Blumlein pair needs to be set up fairly close in to the sound sources--to get an acceptably clear recording. Yet at the same time it has to be fairly far back if the sources of direct sound are spread any distance apart from each other.
These two practical requirements oppose each other, but are both absolute, and there are numerous situations in which no "happy medium" exists between them. As a result a person can't simply decide ahead of time that he feels like using Blumlein for a given recording without knowing whether the physical arrangement of the sound sources is going to work within the limits that the Blumlein approach has. In many situations there is no miking distance which encompasses all the direct sound sources within a total frontal angle of 90 degrees, but where that same distance allows a decently clear recording.
In those situations you either have to use a different microphone pattern such as supercardioid or cardioid, and/or give up making a coincident stereo recording. Unfortunately given the poor acoustics of so many performance venues and the simple logistical necessity of having the performers and other sound sources (e.g. amplifiers) spread wide apart on a stage, in my experience only a minority of performances can be successfully recorded with the Blumlein stereo method.
Nonetheless I would encourage you to look out for the situations which do allow it, because in the right acoustical setting, the naturalness of stereo imaging can be better with Blumlein than with any other known stereo recording method.
--best regards