I don't think I disagree with you, I just think Valve should be the last company that should be under fire for the 30% cut. As in, it should come after plenty of other companies, because they actually do offer many valuable services in return. I'm all for lowering the cut Valve takes, just make sure every other storefront that does objectively less is required to do the same.
It also feels like complaining about the food from one store being expensive, while you get larger potion sizes than other places for the same price. Yes, food should be affordable. Shouldn't the complaint be made towards the industry as a whole rather than the store that is (for now) objectively better than the alternatives?
Presumably this is because a block is different from the content being removed. It simply means the servers stop communicating with each other regarding new communities, posts and comments. This could allow the instance to be unblocked and the old content to continue existing – say for example when an instance has been acting badly, but it gets fixed some time later.
Blocked instances should probably not show up in search, but if you have a direct link to an old post, perhaps this should still be available? Not being able to block a community when its instance is already blocked makes sense, and probably doesn't matter if you mostly check for new content, but I can see it being a bother when its shows up in other situations. One could call this a bug, or an oversight, but I suppose it depends on what the intended result is.