Kyoto was the traditional seat of Imperial power. Tokyo, called Edo back in the days the seat of the Tokugawa Shogunate, a military dictatorship, is the national capital because of that. A whole lot of the action that overthrew the Shogunate happened in Kyoto, so sparing it was in part to encourage the Emperor---in a position that for a very long time had little or no real power---to do exactly what he did then. If he'd tried it earlier, he would have been killed and replaced with a more pliable one. As others have noted, the final surrender was a rather close run thing....