This question is more suitable for /r/HistoricalWhatIf.

The main reason: The Japanese government were determined to fight to the end, and in fact, most of the Japanese were so devote to the state, they were ready to fight to the death also. Look as Okinawa as an example to how they would fight. Okinawa wasn't even considered a main home island. The political ramifications of dropping a bomb were not set at the time, since one was never dropped before and could not be assessed.

Added Bonus: it halted the war before the Soviet's could take over most of Manchuria and maybe even China to form a "far east block."

The first question is, would that be acceptable to the general public? it would have taken years to starve out the Japanese, and this would have led to hugely protracted war. It was firmly in the allies interests to end the war as soon as possible, so as to release the huge numbers of men and women in the armed forces back into the civilian population and more importantly, the economy. When the initial planning for the invasion of japan was undertaken in 1943, the Anglo-American team was unable to present options for the Surrender of Japan before 1947-8 (1).

When these plans were presented as the Quebec conference of 1943, they were rejected by nearly all parties, and they agreed upon the necessity to defeat Japan within a year of the defeat of Germany. These plans were then passed of to the US with a general division of responsibilities between Burma/Pacific. Suggestions by the US navy to carry out a blockade were rejected on the basis that they would only extend the war indefinitely, in addition the example of Germany had shown that she was still able to fight on despite the hugely effective Royal Navy Blockade. Domestic, Political and Military considerations led to the overwhelming necessity to plan for land invasion of japan- Operation DOWNFALL.

Meanwhile the Japanese forces on Japan were not the only problem. There was approximately 3-4 million Japanese Soldiers in China and the South East Asia. Simply starving Japan would still demand the eradication of these forces by a protracted and bloody campaign. In the South the Commonwealth 14th Army in Burma would have been expanded massively following the fall of Germany (and who represents a near completely forgotten contribution to the war effort). To the West the Chinese were continuing their war against Japan which had been waging since 1931. To the North the Russian invasion of Manchuria (commencing 9 August).

A Co-ordinated campaign would have been difficult to co-ordinate as the Russian had little respect for either of the allies who had lost little in comparison to them. Additionally, the chance the communists would be amenable to strategic co-operation with a man called Lord Louis Mountbatten (and uncle to the royal family) is unlikely. Furthermore, Both Britain and the US used Asia as an dumping ground for generals, admirals etc. that possessed a Xenophobic hatred of each other's nations. Macarthur possessed a noted hatred of the British, and was the man slated as the commander of operation DOWNFALL. Admiral Halsey went out of his way to prevent the British Pacific Fleet playing a major role in the bombing of Kure, stating

'(It) was imperative that we forestall a possible postwar claim by Britain that she had delivered even a part of the final blow that demolished the Japanese fleet.... an exclusively American attack was therefore in American interests.'

In short, a blockade was Domestically and Politically impossible, and the Military appreciation was that it was unlikely to achieve the desired effects. Furthermore, a Military invasion would have been an incredible headache to arrange due to the personalities of the leaders involved. Consequently, the Nuclear attack on Japan represented the simplest and easiest path.

Reference (1) Skates, J. R., The Invasion of Japan: Alternative to the Bomb.(Columbia, University of South Carolina Press, 1994), p276-7