The Japanese Government didn't want an unconditional surrender as it would have meant the Emperor (Who was seen as quasi-divine) would have potentially been tried for war crimes and executed.

They didn't care about their citizens, just the Emperor.

Fantastic video which explains everything: https://www.youtube.com/watch?v=RCRTgtpC-Go

Happiness utilitarianism is so pervasive today that people forget alternatives even exist, but there are a wide array of value systems.

For at least some, the suffering was irrelevant. Many held that it would be better for every Japanese person to die than loose the war.