Ex-CTL, thanks for a good summary. I would like to point out a couple of points:
1) the federal system works in a unique way in USA – it is a big country with recently arrived (a couple of centuries on average) population that is pretty mobile (most, except the natives and the slaves, come from people who volunteered to go to the other side of the world). Thus, if you do not like your state laws, you can easily relocate to one of the remaining 49. Same language, currency, even starbucks and other chains. This creates choices for population and competition between state governments. This compensates for the biggest weakness of the modern state – there is competition in private sector, but not in public. Of course, the more feds take over, the less gov competition there is.
2) These freedoms of movement and of religion and of the press are used best by mobile and active population that is not afraid to make choices and act (anshei chayil in the words of Yisro). The rest of the population gets captured by whatever government and information channel they get… and they suffer from the freedoms they are not able to take advantage of. Arguably, these people would be better off with the government that takes care of them, does not allow hate speech, provides social safety, etc