In large bowl, beat butter and 1/2 cup granulated sugar with electric mixer on medium speed until well blended, scraping bowl occasionally. On low speed, beat in flour, salt, vanilla and egg, scraping bowl occasionally, until a dough forms. Cover; refrigerate until firm, about 2 hours.
Meanwhile, in 2-quart saucepan, mix blueberries, 1 cup sugar and the cornstarch. Cook over medium heat, stirring constantly, until mixture boils. Boil 3 minutes, stirring constantly, until thickened. Remove from heat; cool.
Heat oven to 375°F. Pat 2/3 of chilled pastry dough in bottom and 1/2 inch up sides of ungreased 13x9-inch pan. Spread blueberry mixture evenly over dough. Roll out remaining 1/3 of dough to 1/4-inch thickness. With fluted wheel, cut dough into 1/2-inch-wide strips. Arrange strips in lattice design over filling (strips may break apart but will bake together). Trim and seal edges.
Bake 30 to 40 minutes or until top is golden brown. Cool slightly, about 15 minutes. Sprinkle with powdered sugar; cut into squares. If desired, serve with ice cream or whipped cream.