The original signatories to the Schengen Agreement were some of the most nationalistic countries on the planet, and still are, 29 years later.
2. It only feels like the Berlin Wall if you ignore the fact that the Berlin Wall was built to prevent emigration and defection.
3. You and I live on the same planet; mind if I enter and leave your home without restriction? Mind if everyone else is free to, also?
I agree with what you're saying in principal, but the application of ideals is where things become far more complex.
Also, it's worth reflecting on the fact that the federal republic of the United States has totally open borders between its 50 states, which is too often taken for granted, and basically provided the model the EU is struggling to imitate.