New Yorker Blake, who beat world number two Rafael Nadal and Nalbandian on his way to the final in his first Masters Cup appearance, did not lack effort and had 11 break points.
Federer, however, glided around the court to save all but one of them and clinched the year-ending championship in just one hour 37 minutes.
"There's nothing I could have done, he was too good," said Blake. "I've run out of adjectives to describe him on court.
"Just more evidence that he's the best of all time."