Iwo Jima was an incredibly blood battle. However at this point in the war, Japan had a shortage of men, equipment, food, and their navy was basically destroyed. With all of that, why didn't the US Navy just surround the island, plant mines, etc. and wait until the Japanese on the island starved? I feel like that would have been easy and would have greatly reduced American casualties. The island is small so it seems like it would have been a very feasible idea.
The invasion was mainly to capture the airfields on the island, to (a) deny their use to Japan, and (b) use them as a fighter base to escort bombing raids on Japan (which were flying from the Marianas, too distant for fighters), and (c) use them for emergency landing for bombers returning to the Marianas.
The first of these, denying the airbases to Japan, was of marginal importance. Japanese fighters based on Iwo Jima did try to intercept US bombers flying from the Marianas, and in the not-quite-three months of such activity, they shot down under 1 dozen B-29s. Japan also flew bombing attacks on the US airfields on the Marianas from Iwo Jima, destroying 11 B-29s and damaging about 50 more, in total over all of their raids. Assuming that Japan could have maintained the same level of activity on Iwo Jima in the absence of the invasion, they could have operated for a little over 3 times longer, probably shooting down under 40 B-29s. There was a Japanese radar station on Iwo Jima, and denying that to the Japanese was worthwhile, but did not mean that Japan had no early warning of raids from the Marianas - the island of Rota in the Marianas, between Guam and Tinian (see map) remained in Japanese hands, and had an operating radar. (An invasion of Rota was considered and planned, but never carried out.)
The second of these, using Iwo Jima as a fighter base, had limited impact on the bombing campaign, because the switch to night bombing too place at about the time Iwo Jima became a US base. About 1,000 escort sorties were flown, and about 3,000 attacks sorties by fighters. Iwo Jima was also a useful air-sea rescue base, to locate and rescue shot-down aircrew.
As for the third, about 2,000 B-29s landed on Iwo Jima. Some of these were genuine emergency landings by aircraft that could not have made it back to the Marianas, but many, probably most, were precautionary rather than emergency landings - bombers that would probably have made it back to their bases landed to check and repair equipment and refuel. Certainly, some of these precautionary landings saved aircraft, but it's impossible to tell how many,
Overall, Iwo Jima was a useful base, and its capture was useful, but the usefulness doesn't appear to justify the high cost. Intelligence had underestimated the strength of the defences, and the it was expected that the capture of Iwo Jima would be complete within a week (it took over a month), with casualties much lower than in the actual battle. If the invasion had gone as over-optimistically expected, the gain would probably have been worth the cost.
The US armed forces did isolate and bypass many islands held by the Japanese, and would have done the same with Iwo Jima if it was not seen as a useful base. Iwo Jima was not the only case where a planned base was less useful and more expensive than expected - Peleliu is another prominent example (and an even more extreme case, since the expected-to-take-4-days battle took over two months, and Ulithi was captured unopposed as an alternative base a week after the invasion of Peleliu).
The costly victories of Peleliu and Iwo Jima are often considered to be failure in terms of benefit vs cost. In both of these cases, the cost was much greater than expected, so this is a matter of the outcome, rather than the operation-as-planned. The US alternative would have been to call of the invasions after such strong resistance was met, which could have had the unfortunate effect of convincing the Japanese leadership that a US invasion of Japan could be stopped through inflicting heavy casualties on US forces. US persistence in the face of heavy casualties should have been seen by perceptive Japanese commanders as a sign that a US invasion of Japan was unstoppable, and might have contributed to a Japanese surrender if initial US landings on Japan were successful, if Japan had not surrendered before invasion.
The airfields on Iwo Jima:
