If I understand correctly, were you just consuming Tumblr content directly from individual blogs?
The user experience was generally better in the dashboard (activity stream / feed for logged-in users). The dashboard was the vast majority of traffic; blog UI didn't get much staff/engineering attention as a result.
The "notes" feature on Tumblr was absolutely never intended to be a "comment section", btw. There intentionally was no comment section at all originally. This notion was part of the conceptual difference between tumblelogging and traditional long-form blogging.
Contextually, this mechanism came about at a time when comments (on blog posts, YouTube, etc) were complete cesspools of negativity from anonymous jerks. The Tumblr idea was that to respond to something, you would have to reblog it in order to add commentary. This way, if someone wants to spew nasty comments, their blog would be terrible and no one would choose to follow their blog.