Its never been clear exactly how Kandorians could survive with human metabolisms at tiny size, or even if their systems or cells are miniaturized so that common nutrients or oxygen can't be used by them...
Hmm, interesting observation. Maybe this is why enlarging the Kandorians was a nut that took decades for Superman to crack: it wasn't just that they had been made tiny, but also that they had been fundamentally altered in a profound way to allow them to exist at their size.
Though at least the portion about them being able to think and reason normally even at their size makes sense. The history of 20th Century computers is the history of miniaturization - nowadays they have tiny chips that fit on a person's thumbnail that can do all the work of a computer that in the 1940s took up rooms. If human (and Kryptonian) brains can be thought of as circuits, they haven't gotten dumber, they've just been "miniaturized."
Although Superman had to check the air nozzles into Kandor, so they do breathe something resembling oxygen - albeit of a very filtered kind.
I always thought the Kandor thing made sense. Their city was shielded from a hostile environment. Any would they were on would be gigantic to them, so existing in the bottle was the next best thing to being "normal". Even on a yellow sun world they would have to contend with "gigantic" creatures.
Can't argue with this reasoning. And also, if they leave, they will still be tiny next to everything else, really, without a place in the world of giant crickets and daffodils and overly curious hound dogs. Having heat-vision is no consolation next to that. At least in Kandor they are normal sized, at least to each other.
Suddenly the plight of Kandor comes into focus: they are isolated from everything else by their size, and the bottled city is the one place they can be normal.