I'm going to have completely disagree with this. First off, it is definitely an upscale which isn't a problem though. The show was produced in 2004 when very few shows were made in HD. Funimation themselves confirmed it was an upscale before it was even released. The comparison screenshots in this post make that obvious.
The problems with the Blu-ray stems from the "digital remastering" Funimation does with all of their upscaled Blu-rays. All of their upscaled Blu-rays have problems and look terrible because of it. They apply things like DNR (digital noise reduction) and edge enhancement which removes detail, makes things look smeared, causes discoloration, etc. Since a lot of Funi's Blu-rays they've released lately have been upscales, they've been earning themselves a bad reputation because of the poor quality of them.
I'm going to copy and paste a post I made on another forum explaining the main problems with the Samurai Champloo Blu-ray:
Comparison screenshots between the Geneon DVRAB and Funi Blu-ray: http://comparescreenshots.slicx.com/comparison/24906/
Those screenshots for Samurai Champloo show both loss of detail and the intentional grain has been removed. It's basically been DNR'ed through the filtering that Funimation applies to their upscaled Blu-rays.
First off, the grain being scrubbed out is ridiculous. Samurai Champloo was animated digitally, which means any grain would have been purposely added by the animators. Funimation had no good reason at all to remove it.
As for loss of detail, look at these few screenshots for examples:
#4 - If you look at the small house, on the dvd you can see detail on both the roof and side of the house. On the Blu-ray, that detail is blurred out. Also look at the wood roof of the gate and walls up front which also has detail blurred out on the Blu-ray.
#8 - Look at the wood panels across the bottom. On the dvd, you can see detail within them but on the Blu-ray that detail is blurred out.
#11 - The wooden beam, stairs, wood trim near the top, etc. all have detail blurred out on the Blu-ray.
There is zero reason for there to be any loss of detail like that on a Blu-ray. Funimation really just neeRAB to stop adding that filtering to their upscaled Blu-rays and just do a straight upscale instead. It does more harm than good.