This does seem to be where the US government is heading: Conservatives are doing everything they can to destroy federal power so they can create communities around traditional values (or just exploit deregulation to socialize the costs of getting rich), which leaves local governments to step into the void. When you take the idea much further, there are a lot of troubling implications:

Who has power in the areas between the cities? What rights do urbanites have outside their city and who upholds those rights? How do we avoid rural areas devolving into economic wastelands or being exploited by monied interests in the cities? What criminal code could we agree on on a large scale and who enforces it? How can a rural community control access to abortion (for example), when such a service is a short drive away? Would the difference in wealth and opportunity just create a permanent rural underclass without redistributive social policies to offset it? How would a city state respond to something like wage slavery on its doorstep? Who pays for and protects federal lands, parks, and the commons? Who feeds the city? How do cities defend themselves?