What does the blind effect do in Diablo 3?

Solution 1:

Blind is a Control Impairing Effect in Diablo 3. Blinded enemies have a reduce chance to land hits and will not attack unless they are attacked first. Blind effects usually last a few seconds, depending on the Skill or Ability used.

I don't know how much this reference is reliable, but it agrees with your (and mine) observation.

Also, notice that elite monsters subjected to Blinding Flash recover quickly even if they

suffer a 30% chance to miss with attacks.

What I infer is that, elite monster can target you again in less than Blinding Flash's 3-second duration (even if you don't attack them), but the miss chance stays on for the entire skill duration.