No, we're not losing the keyword war!
Remember these things when thinking about SEO:
1.) There are different ways they count the words, so for instance with the keyword tool gives two numbers, the global hits and the local hits. Local tends to be more accurate - and it's always MUCH lower than the global. (I'll be honest and say I'm lazy, and haven't really looked into what they measure with each.)
2.) There is a sweet spot for searching. A bazillion searches mean a term is vague, and most of the time the searchers are not looking for YOU. The actual best place to be in the ability to match the searcher up with the searched is somewhere in the 10,000 to 100,000 range. 1000 to 10,000 is not bad if you don't have a lot of competition. From 100,000 to maybe 500,000 is a rich keyword, but not something you'll have an easy time ranking for, so best to use it as a kind of base term, and brainstorm more specific terms to aim at.
3.) Google doesn't go with exact keywords anyway. Not any more. They have algorithms that are smart about related terms. So if blovel gets used much in a context that shows the algorithm that it's related to web fiction and serialized fiction and blog stories ("blog story" is also a nice ranking keyword), the search engine will assume use of the word "blovel" is of interest to people searching on those other terms.