We had just firebombed Tokyo, and they were still in the war! And we had at most 1.5 A-bombs.
Wasting the one we were sure to have in the ocean might not have worked. With no idea of the destructiveness, the Japanese would have just shrugged it off as just some trick. Then what does Stewie think we should do?
DROP A BOMB ON THE OCEAN?!! BUT WHAT ABOUT THE FISHES, EELS AND PLANKTON?!
Stewart has no heart for mother Erf!!