CTools fails to create the 'ctools/css' folder where the css cache is stored on some occasions. (i.e. wrong folder permissions in default/files, different Drupal file system settings, etc.)
When you use a module that depends on CTools (most notably Panels) this translates in this cryptic error:
'Selected file could not be uploaded, because destination is not properly configured' when you are trying to view a panel page.
You can solve the issue by manually creating the directory as described in issue
The big issue here is that when CTools fails to create the directory, there's no clear error message that provides a hint what causes the problem. Moreover, users are not pointed to possible solutions (create the folder manually, check your permissions, check file system settings, etc.)