May be this is a bug in oracle? Here is what I found out.

1. create a table with blob field and insert a empty blob record.
    SQL>create table demo(id number, data blob);
    SQL>insert into demo values(1,empty_blob());

2. Insert a file of size 1 MB into the blob field using JDBC API.
  After inserting the file, try reading and verifying the contents.

3. Now insert another file of size 500kb ( file size should be less
than previouly inserted file) into the same record( id=1) blob field.

  When you read this blob, you'll see that blob size is returning a
size of 1MB. And the worst thing is, the blob stream in addition to
the new file, has old files junk characters in the end.

So once a empty blob is used to store some data, it should not be
modified and used to store another set of data. To resolve this issue,
I delete the record and insert a new record in order to update the
blob field with the new data.

-saM