Running into this same issue. I'm pretty sure it used to work since I have a site that uses this extensively and I used to be able to view it without issue on iOS Chrome. The site still works in iOS Safari

Another repo

http://greggman.github.io/doodles/test/ios-chrome-iframe-blob/ios-chrome-iframe-blob.html

FYI: This bug effects webglfundamentals.org , webgl2fundamentals.org, and threejsfundamentals.org

All three sites run codepen/jsfiddle like code editors that are entirely client side using blobs. Even on a small screen where the code editor is not used they still use blobs in iframes as they need to inject some changes to the examples to work well in iframes.

now they stopped working on both iPhone (no code editor) and iPad (with code editor) in Chrome. The still work fine in Safari

Danyao, do you think this is something that we should prioritize? 

This appears to be a Chrome only issue. The example URL works as intended (alert pops up) in mobile Firefox.

Breaking webglfundamentals.org is pretty bad. :( I think we should prioritize this.

I wander if extending https://cs.chromium.org/chromium/src/ios/web/url_scheme_util.mm with a new scheme will fix the problem.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/f409b1d98282ab42a12628376f0910d21b3c4073

commit f409b1d98282ab42a12628376f0910d21b3c4073
Author: Eugene But <eugenebut@chromium.org>
Date: Wed Oct 24 19:00:04 2018

Allow blob URLs load in CRWWebController.

This change will only allow blob URLs loading into WKWebView. blob URL
downloads are still unsupported.

Bug:  847073 
Change-Id: I09a963c5b427eb7e3f8530f5b999c34da0fcfa7a
Reviewed-on: https://chromium-review.googlesource.com/c/1297390
Reviewed-by: Danyao Wang <danyao@chromium.org>
Commit-Queue: Eugene But <eugenebut@chromium.org>
Cr-Commit-Position: refs/heads/master@{#602405}
[modify] https://crrev.com/f409b1d98282ab42a12628376f0910d21b3c4073/ios/web/web_state/ui/crw_web_controller.mm
[modify] https://crrev.com/f409b1d98282ab42a12628376f0910d21b3c4073/ios/web/web_state/ui/crw_web_controller_unittest.mm

Verified on chrome canary version 72.0.3595.0 on iPhone 8 plus with iOS 11.4.1 and 12.1 Beta 5 and iPad 2018 with iOS 11.4.1, following the steps mentioned in comment #0.  An alert pop up is displayed when the page is loaded.  Looks good.