The concept of atomic bombs were known. Telling them we made one would have provoked a "so what" reaction from the people who refused to consider giving up when their empire was shrunken down to the Home Islands and some land in China.
That is a prime example of the crippling effects of that kind of denial.
1) It is a pure hindsight argument, inapplicable to an assessment of the decision as made - especially on ethical or "courage" grounds. And it seems to be made without awareness of that.
2) It makes no sense, even as hindsight:
2a) The discovery that the US possessed the Bomb was supposed to provoke reconsideration by key people, that was what was expected or at least hoped for, and it did in fact do so almost immediately. To see somebody argue that earlier possession of such information could not possibly have had an effect even over weeks or months, in the face of its actually having had such a dramatic effect at the earliest possible moment, is bizarre.
2b) "The people" who would have shrugged at the incoming annihilation of Japanese civilization did so after the Bomb dropped as well, as expected, but they were not the whole of the Japanese command or the Japanese people, as was known at the time. The Bomb was not expected to sway the incorrigibly fanatic, but rather the others - the less fanatic, the less suicidal. It did.
2c) The concept of the Bomb being known argues even more strongly for the earliest possible communication of the fact of possession, especially given the possibility of an earlier end to the war at so little risk. As agreed: The Japanese command and scientific establishments were perfectly able to comprehend the nature of the threat, had it been communicated to them.
2x) And so forth.
3) It is a cover story, something invented later to paper over a cognitive dissonance - its incoherence a consequence of the denial involved, its existence a mark of the vulnerability created, the threat posed.
Thereby the relevance: cowardice is a strong and perhaps too personal a word, with lots of baggage, but if we can step back and look at it as a cultural feature maybe a little of the reflexive walling can settle back? The existence of stubborn incoherence in a cover story marks something that - however habitual and reflexive and customary - is accurately describable as a fear, a sensed threat. And if the reaction to this threat involves a re-ordering of priorities that cannot be acknowledged, an elevation of threat-response above what the responder themselves is willing to defend, then even though a term like cowardice is - as they say - not unjustified, we could ease off on its implications.
Contrasting neutral examples:
Witchburning was cowardice, in the Middle Ages, but we do give a partial pass to those whose fear was created by others, was a consequence of trust or belief in authority. Their priorities were re-ordered for them, against their own better nature, in a sense.
A while back there was a nightclub fire in Rhode Island, and many died because the escaping crowd jammed the exits. The usual explanation is that they panicked - the crowd panic is thought of as a sum of individual panics. But recent and more sophisticated "agent-based" computer modeling of such crowds suggests instead that individuals in panic poorly explain that event as it happened - that the people in that nightclub behaved as if they were taking care of their friends, as if the welfare of their immediate companions were their highest priority. We give such people a pass - even though that willingness to let others burn if their friends were saved caused many more to die than would have if their courage had risen another level.
