I found a quote from the late Rev. Benjamin T. Roberts, General Superintendent Of The Free Methodist Church, that expounds on Job 1:21 --"The Lord gave; and the Lord hath taken away: blessed be the name of the Lord." Roberts added this explanation: "He blessed the Lord in his affliction, and the Lord blessed him out of his affliction. His latter state was better than his first."

Another passage in a secular work on happiness renders this usage that seems more in line with your meaning: "When I asked a distraught mother what she did when her little ragamuffin tramped through her kitchen leaving a muddy trail to mark his progress to the bathroom, she replied, "I gave him a good shaking and blessed him out!" That hardly indicates a happy state of affairs."

On yet another web site there are recorded passages from diaries and such giving accounts of Palmer's (later Havis's) Battery's participation in Gen. John Hunt Morgan's Christmas Raid into Kentucky in December 1862. Note: "After a while this boy hollered to Sgt. Duncan "Here he is behind a tree". I didn't cuss him but I blessed him out and got up and went to the officers' tent." This passage leads me to believe that "blessed him out" is perhaps an old Southern expression meaning to tell someone off without cursing at them or using unsavory language.

I also found usage of it in out takes from the Mel Gibson movie "The Patriot" along the same lines as your usage. I found "blessed him out royally," "blessed him out good and proper," "blessed him out publicly," and "blessed him out good."