Hi @Michael Hofmann and welcome to HTF. I don't have any beef with them overall and I'm sure they would agree that some things could be better than they are, but that the biggest issue is the quality of the elements they have to work with. I haven't seen BV so I can't comment, but I'd be very surprised if it was 'unwatchable' due to compression.
A cursory look at reviews from DVDTalk and Bluray.com who tend to be the most critical gave it rave reviews
https://www.blu-ray.com/movies/Blue-Velvet-Blu-ray/232096/
https://www.dvdtalk.com/reviews/73849/blue-velvet-criterion-collection/
The Amazon reviews are all very positive:
https://www.amazon.com/Blue-Velvet-Criterion-Collection-Blu-ray/dp/B07NRF4K57
A cursory look at reviews from DVDTalk and Bluray.com who tend to be the most critical gave it rave reviews
https://www.blu-ray.com/movies/Blue-Velvet-Blu-ray/232096/
https://www.dvdtalk.com/reviews/73849/blue-velvet-criterion-collection/
The Amazon reviews are all very positive:
https://www.amazon.com/Blue-Velvet-Criterion-Collection-Blu-ray/dp/B07NRF4K57