In the first case, when the man is pulling directly on the block, the end of the rope in the man's hand is exerting a downward force of 250N on the man. His own weight is exerting a downward force on him of 500N, so to keep him in equilibrium, the floor is required to exert a force of 500 + 250 = 750N. He's in trouble, if the floor can only withstand 700N!
In the second case, where the rope passes over a pulley, the force exerted by the rope on the man is 250N upwards (assuming that the pulley is perfectly frictionless). So this time the floor must exert a force of 500 - 250 = 250N on the man, to keep him in equilibrium. Good - the floor can stand that!
Do you see this OK now?