Blockading was rejected in this case because it went against the tenets of military science. Japan had millions of weapons stockpiled for the invasion. They needed civilians to be trained in the use of those weapons. Two and a half million rifles and carbines were available for arming the civilian population which would fight alongside the over four million Japanese military personnel on the mainland. Each day that went by meant more armed and trained enemy. Additionally, a blockade would give the Japanese time to continue building defensive lines, tunnels, etc.
Japanese cities were being firebombed and were suffering casualties much greater than what the atom bombs would cause. If anything, it might be concluded the firebombings were far worse than the atom bomb bombings. The firebombings were being carried out by B-29's and they were still suffering losses from anti aircraft and even normal non combat inflicted crashes. Each craft carried 11 crew members. Hence, both the Japanese civilian population and the American military were suffering casualties until the Japanese military and government could be forced into surrender.
www.eyewitnesstohistory.com/tokyo.htm