7th overall in Offensive Rating, ranked number 2 in raw FG%, 6th in TS%, and the TO% is at the league average.
"So why does it "look" so bad?" It really doesn't. I think many here still expect too much after 2014's Finals perfection. The offense is still generating a lot of open looks from 3 (Danny just isn't hitting right now, aside from last night, and even then, the team is still shooting 37% from 3, which is 7th best in the league), Parker has much more spacing to operate with and looks the best he's had in 3 years, and Kawhi is getting any mid-range shot he wants. And if you think we're giving up a lot of 2nd chance points, the Spurs rank 5th in offensive boards allowed.
"Our defense is great, so why aren't we blowing teams out more consistently if the offense isn't a problem?"
The Spurs have the 2nd highest margin of victory in the league (the soft schedule has something to do with that, as well), but I agree that they let teams back in all too often and make it harder on themselves. The reason is: Freethrows. The Spurs rank dead last in in FTA (luckily their FT% is good and they've only been outscored at the line by 1 point this season. Interestingly, Golden State has been outscored by 33 points at the line this season and over 200 points last season, but you can throw out the book when you evaluate that team since their 3 point shooting is historically ridiculous). OKC, Lebron-era Miami, Cleveland, the Clippers (when they're good), all shot/shoot a lot more FTs than their opponents over a course of season.
Silver lining here is that the 2014 Spurs only shot 1 more FT than their opponent over the season, but that team shot .27 higher from 3. More silver lining is that once Kawhi starts getting star respect, he'll go to the line much more. Kobe has made a living getting touch fouls in the post and fouled on jumpers. Kawhi will be getting those whistles soon. LMA will get his calls (he's near career FTA average already), and if Parker stays healthy and spry and continues to penetrate, he'll get calls.
And once Danny emerges from his slump, this offense could be very deadly.
The offense is fine, it's just not refined yet.