Why Germany could not simply match the Tiger Cubs

Would Germany build one or two more Blucher-like cruisers in response?

Probably not: German money and yards were already committed, so each such cruiser would likely replace a battleship or battlecruiser.

The High Seas Fleet's unbalanced structure reflects hard financial and yard limits. Germany understood useful cruiser roles but lacked Britain's spare battleship-building capacity. A new Blucher-like cruiser would displace a ship already valued more highly in its battle fleet. Britain can add a layer of force structure that Germany cannot readily copy without an explicit tradeoff against a battleship or battlecruiser.