Grid smoothing DAX

That should be rather simple, but you won't be able to tune it nicely - you can use a parameter value to twist the knob but it is not nearly as interactive as a slicer. Let's try both ways and compare the outcome.

In Power BI you can use the Play Axis to show multiple generations...

You can calculate the second generation table thusly:

Table2 = SELECTCOLUMNS('Table',"X",'Table'[X],"Y",'Table'[Y],"Generation",2)

Value = 
var x = Table2[X]
var y = Table2[Y]
return CALCULATE(max('Table'[Value]),'Table'[X]=x,'Table'[Y]=y) -- plus the weighting of our choice of the neighboring cells)