How sharp are the individual frames? If the subject was in motion then it's possible that each frame has some motion blur. Without stabilization you don't notice it as much because the movement is natural, and what you expect to see from something shaking. But after you stabilize it then you end up with seemingly random directional blur that changes from frame to frame with no movement to justify it.

Just a guess, of course.

... and some deshaking programs are better to very specific tasks than others - you can only find out by trying - I have had good results in many cases with Virtual Dub and Deshaker also - of course a much more difficult setup - but definitely worth it in some cases.

What your seeing is the following:

At close ranges, as the camera moves, so does the perspective. In other words, the view of what is behind the camera is at a slightly different angle. Thus when you deshake the footage, you get a sort of liquid wobbling effect as the slightly different angles morph into each other since the camera no longer seems to be moving. From further distances this effect is subtle enough that you don't notice it, but from close range it is pretty obvious. It is not a Mercali problem. You will get this effect no matter how you stabilize close up footage. My only suggestion is to use settings which lesson rather than totally remove the camera shake. That way the remaining motion will mask the wobbling effect.