Its ridiculous talking of Blitz-Units = metres etc.
In some cases, yes. But most of the time, it is still a very good convention, because you can easily relate to it. If I want to place two persons with a certain distance them, I don't want to think "ooh I want about 3.5 meters between them, so with my scaling system, I have to multiply that with 32, ..." or "this building will be 8 meters high, so that's 256 units" or whatever... it's easier just placing them 3.5 units away from eachother, and making the building 8 units high, isn't it?