Much of Japan's military manufacturing was cottage based. Small factories in homes throughout the country. LeMay (and others), made a strong argument that civilian homes harboring military manufacturing were legitimate targets. Some interesting observations of these home based factories have been reported by former P.O.W.s. Most recently I read another observation of this in Unbroken.
As for bombing a people into total submission... I know of no instance in history that the outcome was any different than that experienced by the Nazis undertaking the London Blitz...