I think it should be exposed by the API what instances and users are blocked on an instance level.  There is no good reason not to do so.  An individual user has a right to privacy.  An instance does not.  Any argument that an instance does is obstensibly the same argument that corporations should be "people", which is silly.  The network needs to have a clear inter-server graph to be resilient, and the reason that right now it is so deeply fragmented essentially comes down to Mastodon doing as much as they can to obfuscate what is a real networking problem and what is a software problem, right down to literally lying with their HTTP status codes in ways that break the specs.