There is a reason that the founders rejected direct democracy, distributed power amongst the states, and limited the power and reach of the federal government.
At least two distinctly separate groups of reasons, actually.
The reason that the US is a Republic is functional. The population voting directly on every issue is impractical.
The reason that the national government doesn't have sovereignty is because the US was founded as a federation of states [the EU would be similar in this regard]. Its the same reason that it's "one vote per country" in the UN.
It has nothing at all to do with the idea that 864,746 mi^2 [the size of the US in 1776] wasn't "local government" and 663,267 mi^2 [the size of the largest current state] is.
The 40+ less populous states will never allow a Hunger Games like power grab by a bunch of elitists in a handful of cities that can't even run their own cities effectively yet think they should rule the rest of the country.
You know how elitist your statement is, right? Does the hypocrisy hurt?
And as I watch the federal outreach needed to get basic services like phones to rural areas, and the huge dumping of cash into those areas to keep them afloat... I must wonder "who can't run what now?"
If California goes off on its own it'll be a narrow 20-30 mile wide strip from Los Angeles to San Francisco and the rest of us will wave goodbye and chuckle while they dig up their lawns, parking lots, and golf courses so that they have some hope of feeding themselves. I'm not sure how the nation of NYC/Albany or the country of Chicago would feed themselves but the rest of New York State and Illinois want a divorce from those cities as well.
So now you've redefined CA?
OK. Let's imagine that strip: some of the highest income land in the world, separated. Somehow all the agriculture in there (say: Nappa Valley) just doesn't count.
Fine. Let's picture that. What would happen? How would they feed themselves?
Well: as the country with probably the highest per-capita GDP outside of Qutar, I suspect they would import their food... and eastern CA better pray that the west imports if from them rather than Central or South America.
With everything from Silicon Valley to Hollywood gone, not to mention the massive industry in LA; you'd better prepare for a massive reduction in what the state does... you know, like roads and bridges; or prepare for a massive increase in your taxes.
Don't expect the Fed to help much either. California contributes $405,851,295,000 to the federal coffers.. that's 130 Billion more than the #2 state and 12% of total revenue. [for those not good with math: the "average" state would contribute 2% of the federal budget; meaning CA is paying the weight of 6 states]
So, on top of everything else, your "power to rural states" is one of those "taking money from one person and giving control of it to another" you pretend to hate. Since those cities pay the costs of the federal government, perhaps they should chose how their own money is spent?