We're talking about blocking all content on an instance though--not necessarily a few nasty communities or posts or users. Blocking an instance blocks all content, including non-offensive content that may be posted by legitimate users.
For an admin to block everyone on an instance from all of their users just because of a few bad actors still seems weird to me. It's just gonna lead to every instance blocking each other, which destroys the experience for users and defeats the point of federation.