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This is by design. It's supposed to be a challenge, to make the host club a tempting alternative. Of course the club isn't in yet, so it's just extra punishing for now, but that'll be the structure of it eventually. You really should have at LEAST one Dazzle Blast at that point unless you've been wasting them though. The game gives you a ton. Some people were even carrying them over to the boss until I prevented that.

(+1)

I kind of figured that the alley is supposed to be the hard mode for when you have abundant combat resources to spend while the other route might have it's own deterrents.