To fix the blurriness problem with Firefox and fractional scaling on Wayland, I found out one has to run it as a Wayland app, launching it with MOZ_ENABLE_WAYLAND=1. That raises the question, why isn't this done by default? It's not as if the Ubuntu devs could have possibly overlooked Firefox. Can it cause some problems? I have been running it like this for a while now and it seems to work fine.
I'm using a default 22.04 Ubuntu, running the default Firefox snap. To clarify, Firefox does run on Wayland, but as an X app, via xwayland, not as a Wayland app, unless I set the environmental variable mentioned above.