Your blog is supposed use home.php and whatever page you set your blog to appear at will simply use home.php to populate that page. Think of "your blog" and home.php as being the same thing. It doesn't really make sense to want you blog to be a static page you created. So even if you include some content in a page your created, if you set that page as your site's blog, your blog will show up there and not the content you created.
home.php will show up at the home page unless you specify a different page to be the home page.