The two nukes were dropped on Japan, after an extensive period of fire bombing their cities, and I'm pretty sure that more were killed by the conventional bombs. The nukes were more of a shock and awe kind of thing, like 'the whole country could be gone, if we drop more, so drop your weapons' kind of message.
Dropping nukes in this situation, will hurt Japan more than it will the Empire, because the Empire can rationalize away the bright light that took their cities away. They have gods that walk among them, one of them must have decided to protect those people from Japanese interference.