That is far from simple. Minecraft has a lot of interactive elements in the world that aren't a full block (1x1x1) in size but which are centred on a block or connect between the space between two blocks. Making each 1x1x1 block into 8 individual blocks would break (or at least hugely complicate) a ton of Minecraft elements. There are already 'blocks' which aren't full blocks, e.g. stair blocks, slabs, doors, trapdoors, panes, bars, ladders, hoppers, pistons, plates, fences gates, buttons, levels, redstone items, tracks, it goes on and on. There are actually probably more individual non-fullblock items than full blocks. Minecraft item placement works because of the coarse granularity of items within the game world, not despite of it
At a basic level you're effectively increasing basic world complexity by 8 times as much, requiring 8 times as much processing for everything. Minecraft would no longer run in cheap computers because both RAM and processing would go through the roof.