The problem is because of the fiber-optic nature of the cases. If the same piece of plastic is covering both the flash and the lens, then some of the light will bend through the plastic and create that blue haze over the lens (LED lights are, actually, blue).
If you look at the iPhone without a case on it, you'll notice that the lens for the camera is actually completely isolated from the rest of the glass by a metal ring, which keeps this flare from happening.
Consequently, the only solution is to have a case that does not cover lens, or, ideally, the lens or flash. Keep in mind that if you have a thicker case that is translucent, even if it doesn't cover the lens, the tapering around the lens can act as a ring flash, illuminating the camera lens and casting a blue flare over the lens as well.
So, the problem is with the type of case you're using, basically. If you're using just a clear back decal covering, you'll want to cut a hole out for the camera and maybe flash. If it's a more complicated case, well... I leave you to your own devices (though you'll likely void warranties of anything you take a razor or drill to!)