While this question didn't come from a blog reader, it is a question I receive frequently from submitters:
"If I posted my story on my blog, do you consider that previously published?"
Short answer: Yes.
Long answer: Yes, we do. As do almost all other markets.
A magazine, you see, is in the business of procuring and keeping readers. It's how we function, it's what we're for, it's how some of us make money.
So when I'm buying your story to put onto my pages, I'm not just paying you for a story for the hell of it. I'm making an investment in you, in the idea that your story is going to bring potential new readers to my magazine.
But if everyone you know--your family, friends, acquaintances, critique group members--have already read your story on your blog they're much less likely to read your story on my site, which means they're much less likely to potentially purchase a copy or a subscription, much less likely to click on ads on my site and buy products from our sponsors, which then doesn't put money in our account with which we could otherwise afford to buy more stories from writers like you.