It's easier to just shoot an email to your attorneys and have send a C&D than it is to enter into a more protracted, ad hoc conversation. It costs virtually nothing to do this. Some associate at the firm types it up using one of a bajillion templates, sends it out with a partner's name attached, and bills the client for <30 minutes worth of time.
You, too, can hire an attorney and pay them a few hundred dollars to reply! Or you can try replying yourself.
C&Ds are not legally binding, of course, and the recipient can choose to comply, respond, or ignore as they see fit. Because of how trademark law works I wouldn't recommend "ignoring" since the complaining party is pretty much obligated to escalate matters.
For example, a friend of mine created a parody website of a world-famous newspaper and predictably received a C&D. This was more than just the trademark: it repurposed content, used the same typefaces, mimicked the same layout, etc. They agreed to let him use it after he replied and agreed to include a prominent disclaimer up top stating that "<Newspaper> trademarks used with permission of <Newspaper Corporation>" and explaining that this was a parody.
I don't know if the OP tried to do this, but I will say turning to the "court of public opinion" as a first course of action makes this outcome somewhere between incredibly unlikely to impossible.
Tumblr isn't trying to be evil -- you're using their name, after all -- they're just trying to take care of it in the most time-efficient manner possible. The #1 most time-efficient manner is sending a C&D. For folks whose infringements are minor and inconsequential, it's likely that the #2 most time-efficient manner is to let them use the name in the domain with a prominent disclaimer and an explicit, albeit revokable, license.