Every modern computer has many independent processors, and they all need to execute software from somewhere. Many of these independent processors load their software from some sort of onboard memory, others rely on the main processor to load their software. The second case is what these blobs are for the most part.
As much as any other opaque software (i.e. not FOSS or otherwise transparent around source code auditing by arbitrary third parties). That is, in short: yes.
> is it like a settings file?
No, it's more like the operating system for the wireless card itself, running on the card's own microprocessor.
