It's lossy, but not destructive, and a 'sharpen' operation is technically the same as blur but in reverse. So you won't end up pixel-perfect after doing an 'unblur' but you will be able to make out more than you could before.
Also if you have multiple pixelated/blurry images that helps you can reconstruct it more easily, e.g. if different newspapers print pixelated picture of the "suspect" you can reconstruct it pretty accurately.
That's the most surprising thing I've read today. I assumed it was destructive.