Dropping the Atomic bomb on Hiroshima and Nagasaki was a good decision for America because an invasion of Japan would have caused casualties on both sides that could easily have exceeded the toll at Hiroshima and Nagasaki. With only 5 bombs ready, it was too risky to "waste" one in a demonstration over an unpopulated area.
The Japanese had already demonstrated near-fanatical resistance, fighting to almost the last man on Pacific islands, committing mass suicide on Saipan and unleashing kamikaze attacks at Okinawa. American refusal to modify its "unconditional surrender" demand also didn’t help the circumstances in Japan. Fire bombing had killed 100,000 in Tokyo with no discernible political effect. Only the atomic bomb was thought to be able to jolt Japan's leaders to surrender.
