I think it's interesting that people on both sides of the states-rights spectrum see themselves as defenders of liberties. Even if there is conflict in the details, that is legit common ground!
There's a lot of common sense power to the idea that smaller political units can reach an acceptable compromise more easily, and that having multiple governments offers some choice to those who can move. But there are big factors the other way too:
- The issues that most divide our definitions of liberty are aligned with differences in urban vs rural, majority vs minority, and rich vs poor. These are clustered such that they exist at state levels as much as federal.
- Smaller political units are more vulnerable to outside forces ... National parties can airdrop money into local campaigns to get strategic outcomes that have little to do with the constituents.
- The citizens of smaller units tend to have more direct power relations with each other, pulling them towards policies that explicitly maintain or redistribute power. This creates big problems for the less powerful, who see their position become more engrained and who often don't have the resources to vote with their feet.
None of this is an answer to "what's the best unit". I think that whichever personal liberties you value, you have to be pragmatic about who is protecting them where.