My hands were not shaking for any of the shots and I did use manual focus.
I added 2 more shots today.
One is a building by my work. The lighting was quite bright and thus the shutter speed was over 1/4000 a second. At that level the effect of minor shaking would be greatly diminished. I can usually hold a camera steady enough to avoid blur down to about 1/40 a second if I am careful so I know its not me.
By comparision I took another shot tonight, inside with much lower light conditions. Its a battery in my hand taken while I hold the phone with the other hand. Shutter speed 1/60 a second and the shot is clear. This shows I can indeed hold it steady enough so hand shake isn't a factor. It also shows that my camera is good with macro shots. but not much else.
I looked around for the reviews I used before purchase and have this one: http://www.anandtech.com/show/7235/moto-x-review/10
The shots shown there from the MotoX show it is capable of focusing fine, at distance, compared with other phones. It may have other issues with odd colors and patterns, but the focus is solid enough.
Based on the review shots and the shots I've posted I do not think the Moto X is simply incapable of focusing as clearly it was able to focus for the review. It looks like my phone may have a defective camera module or somehow be stuck in some kind of macro mode.
Anyone know if I can get an advance replacement or something vs just sending it back and waiting?