Are concrete blocks a cost effective, modern and strong solution to building a house?
If you can get past the appearance, here are some other considerations: 1) cost of installation of blocks, 2) wall insulation, 3) paint, 4) electrical, 5) larger foundation, 6) seismic loading, 7) future changes, 8) thicker walls.

1) Material cost of blocks is just the beginning. You'll need special shapes, (i.e.: lintels, corners, etc.). You'll need mortar, have you ever laid a block? It's difficult and slow. You'll need reinforcing (horizontal and vertical). You'll need grout in the cells to "hold" the reinforcement. 

2) You'll need special insulation on the interior or exterior of the wall and then you'll need to cover that insulation with something. 

3) Concrete blocks are porous and you'll need to coat the wall with a block filler before painting. 

4) Installing anything in the wall like electricity, will be difficult. 

5) The weight of the wall is significantly more than a wood frame wall, so the foundation will need to be larger too. 

6) Heavy construction is critical in seismic zones and light buildings are critical in high wind zones. Wood framing is easy to add extra reinforcing (plywood), but block construction gets expensive, especially at openings. 

7) Any future changes, remodeling, etc is more difficult than wood. 

8) Because the walls are thicker, the building needs to be larger to provide the same size rooms as with wood framed walls. So, you'll have a larger "footprint" and thus require more roofing, attic insulation, etc.

...But fire protection may be better...