I'm guessing this may have actually been created in a 3D program... but we can still approximate this effect using Illustrator.
You are entirely on the right track with using the Perspective Grid.
Here is a simpler example like the one created by user287001 I'm posting just to show you that it can indeed be done in Illustrator:
Note that using this method the squares stay perfectly vertical from the front row all the way to the back:
Now to recreate your example I used a two point grid which looked like this:
The rectangle on the right is my artboard. Closeup:
Not sure if blending is the way to go... Perhaps if you created and expanded your blend off the grid and then dragged it on. I personally just used multiple squares, made right on the grid by moving while holding Alt to copy, then Ctrl+D to make the full row.
Here is my first row:
To make my second row I move the first row while holding Alt to copy and pressing the 5 key to move it back. Second row below... I now already have 80 squares:
And using Ctrl+D to take the rows to the horizon:
How all of this works for you will depend largely I think on the processing power of your computer. My example has larger and fewer squares than your example yet my laptop (with 8GB of RAM) still had to work hard to handle what ended up being over 20,000 individual squares (and that just for the ground plane).
Lastly I randomly selected squares and hid them (Object > Hide > Selection)...
Here is my final result, replacing the ground plane in your example:
It's not identical but it's pretty close. I doubt if my computer could handle too many more squares than this... so your results may vary.