If I'm not wrong the only block Toads are turned into are question blocks in the original Super Mario lore. This also explains why they give you a Power-Up.Ok time to go old school, in the instruction pamphlet of Super Mario Bros. It suggests that toads were reincarnated by bowser to be brick blocks. Imagine being killed (again) by Mario's head.
Wait! does this mean toads went to hell and were reincarnated as blocks???