Have you never been outside?
Shadows get blurry if the light source is further away, and its based on the intensity of the light. Since in most places the atmosphere dilutes the sun, and the sun is far away as hell, shadows are blurry.
Toy Story 1 probably had its lighting system that shot out a few raycasts and just determined whether or not something was in shadow or light. Incredibles 2, or any modern pixar film has such insane lighting systems going on, including atmospherics, subsurface scattering, and physically based rendering.
I don't care if you think Pixar's glory days are over. The art of their movies is still nice as hell. Don't be stupid.