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Ok, that should probably work. I assume when you launch the Quartus programmer that it can detect the USB-Blaster hardware?
If so, then when you ask it to autodetect the devices, the correct one shows up (detected by scanning the JTAG ID)?
Can you then do an erase / blank check on the device, and have it pass?
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It does detect USB Blaster hardware and it shows the JTAG ID.
I installed Quartus on another PC. I made the exact same block diagram and had the same issue.
BUT!
I did get error codes when trying to program:
209014 CONF_DONE pin failed to go high in device 1
and
209012 Operation failed
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