Tricky one this.
Some people well tell you that it is an extremely stupid thing to do and that you absolutely mustn't fly blind in cloud. Others will tell you that the sky is big and that the risk of a collision is very small. It's really up to you to determine if you think it's an acceptable risk. Your instructor should respect what you decide - if he doesn't then change instructor.
Here's my thoughts :-
1. Yup, feels wrong to fly blind, but it also feels wrong to fly in good VMC and realise that an aeroplane has got uncomfortably close to you before you've seen it. I and many others don't believe that you will see all traffic visually - due to its constant position in your view, you are least likely to see the traffic which is most likely to conflict with you. You can reduce the risk of collision in VMC by using a disciplined scan but I don't believe anyone who says that they can spot all traffic.
2. In IMC in uncontrolled airspace there is usually less traffic than in good VMC.
3. There have been several mid-air collisions in this country in VMC. I don't believe that there have been any in IMC - if anyone knows different please correct me.
4. You can significantly reduce the risk of flying blind in IMC by not flying directly overhead navigation aids.
5. You can significantly reduce the risk in both IMC and VMC by getting a radar service - sounds like your instructor did this and so minimised the time that your were "blind" for.
6. Some commercial flights operate in uncontrolled airspace. They will get a radar service if possible, but when it's not available they may end up flying blind - bet you and the commercial passengers didn't know that.
Personally, I will fly blind for brief periods so long as my students are OK with it - but I try to minimise the time that I am blind for.