It's a viability criteria when creating or joining instances.
That wasn't in dispute and still isn't particularly relevant.
No matter how good or bad instancing is without block, the presence of additional exclusionary factors, like blocks, will generally make it worse.
Personally, even though networking has always been sketchy and generally gotten worse as time has gone by, I rarely have issues encountering random CMDRs in fairly high density, even if I'm not winged with any of them, and there is significant potential for a block, against anyone around, to ruin things by fragmenting instancing.
From the perspective of the player doing the blocking it is....
Unless one blocks everyone they encounter, in which case they still have to reinstance after encountering a new CMDR, this isn't the case.