“What does the blue light bar do on the PS4 controller do?”
The light bar on the new PS4 controller can make games more immersive if game developers choose to use it. Game developers can use it in their games however they want to. For instance the light bar can be used to communicate health status by changing colors. Developers can also adjust the brightness level of the light bar.
The light bar is also used by the Playstation camera to help track and detect the controller position.
Can you turn it off?
Unfortunately it cannot be turned off. The light bar is an indicator the controller is on and active.