Views 3: display "block" doesn't show full node
When you select teaser view instead of full content you can see comments in your block.

If you see implementation of comment_node_view() comments are displayed only in node lading pages.

if ($node-&gt;comment &amp;&amp; $view_mode == 'full' &amp;&amp; node_is_page($node) &amp;&amp; empty($node-&gt;in_preview)) {
  $node-&gt;content['comments'] = comment_node_page_additions($node);
}


If you enable the same block in node landing pages you can see the comments in your view. 

If you enable the block other than node landing pages, then you cannot see the comments because of node_is_page($node) condition i think.