2) Solve the states water issues. Dogma. Free markets fix everything. Thus by implementing free markets for water (and first removing historical water rights) everything is solved, because markets are good at that sort of thing.. We just have to start charging people for water ( http://seekingalpha.com/article/213157-how-the-free-market-c... ) http://en.wikipedia.org/wiki/Water_trading , and http://worldsavvy.org/monitor/index.php?option=com_content&i... , and http://en.wikipedia.org/wiki/Water_privatization
3) Ease traffic congestion : Two ways this works out. a) free markets logic on cars. Toll ways, road privatization, time of use based pricing etc. or b) free up the environmental regulations to start building more lanes on all the highways everywhere (though that doesn't really help).
If it was done well then maybe the 6 states would be a good thing. More likely than not it is simply a way shake up the political apple cart so some people can get more apples than they had before.