I feel like this point is hardly ever appreciated. I don't think we quite live in that world (where's my open source nuke?), but we're always oscillating on the continuum if we take a long enough view of the situation. The extent to which power is distributed relies on the extent to which technology is distributed, but also the extent to which the distributed technology can be utilised by a relatively small group. A small group with equally good spear designs still loses to the larger group. A small group with equally good drones, nukes, viruses, and firewalls might be able to put up something closer to an even fight. A radical open sourcing of technology might lead to a breakup of the modern nation state into smaller entities. Until it does, or some sort of parallel structures form alongside the nation states which they are unable to actually police, I wouldn't call them undermined. The parallel structure scenario might be somewhat arguable today, but always has been; the line between organized crime and government is blurry. I don't think we've moved significantly far in that direction as a result of open source tools yet. If there ever comes a day when private defense contractors can accept Bitcoin without KYC and taxes, just rolling through the streets in a small division of tanks selling AK-47s to passing school children, I'll completely agree that the nation state has been undermined.