I would say all of the above, but easily placing Shock and Awe at the top of the list. Firebombing was devastating, and it could cause phenomenal destruction on a city-wide scale with the firestorms it created, but it was still understandable and something people could relate to on a human level. Lots of airplanes dropping lots of bombs makes lots of fire and causes lots of destruction. The concept was something that even the illiterate could readily understand and relate to, and it was something that they could fight as well because after all the more bombers you shoot down the less effective the bombing run is.
Then the atom bomb comes along and with just one bomb they did what used to take hundreds if not thousands of bombs in dozens of bombers a concerted bombing run to do. How do you fight that? How do you relate to that kind of power from a single object on any level? Lots of bombs causing a firestorm you can understand, but one bomb blinding everyone, turning the city into a pile of rubble and ash, vaporizing things instantly, and then poisoning people who survived?
But even that wasn't the issue. The problem was the implications of being able to do that with one bomb and one plane. Back then a bombing run looked like
This. I count at least 20 readily visible bombers in that picture, in reality there were probably a lot more and at least as many on the other side.
Dropping two atomic bombs basically told everyone that was watching: "You know how many planes we have. Any one of them could do this and you'll never know which one. Can you shoot them
all down? Every time?"