Indiscriminate bombing of civilian areas definitely is a morale booster. Just ask Churchill. He will tell you he got on his knees and thanked Jesus when the Nazis stopped bombing ports, and started bombing civilian neighborhoods. It basically saved England from starvation, while annealing the the populace to the long hard slog.
OK so please explain why the Germans and the Japanese stopped fighting and surrendered.
Let me jump in here to say that indiscriminate b0mbing of civilians (which I don't think is really what is contemplated anyway) is a morale booster until it stops being a morale booster. By which I mean that there is a point of critical mass at which the population suffers so greatly that morale is broken (See, Berlin and Tokyo, 1945). Because the RAF had its Finest Hour just in the nick o' time, the Brits, who were a pretty bulldogish lot back then, really got their backs up and became even more determined to win. Had it gone on much longer (as would happen to Berlin and Tokyo), there may very well have been a different result.