I don't know. That hole isn't all that large. All their oxygen is provided by a few plants. All their food and water comes from those and mushrooms.
Redcloak had passing grades in chemistry, you know. He is aware that explosions (especially in the plural) would eat up a lot of oxygen, while potentially producing toxic by-products (stuff gets burned, after all) and definitely producing quite a lot of fine dust (which would make the remaining air even less breathable), not to mention the shrapnel (the walls are made of solid stone, and with the right crystal structure it could fragment into hundreds of really*really sharp shards flying in every conceivable direction). Also, plants don't tend to like fire (I'd know), so that could have become an issue as well. I can see why he would not try that.