The ease of unrestricted migration mitigates the leverage of individual state governments. Movement between states acts as a referendum on the wise exercise state power. If you don't like the tax rates or level of government services, you can move. For generations, people have moved to different neighborhoods based on the quality of local education or the perception of crime. One of the largest, but most inconspicuous migrations was the massive migration of blacks from the South in the 1950's.
People cross state lines to take advantage of different sales taxes or laxer divorce laws.
If you want to avail yourself less regulated medications, visit Mexico. The coming of the information age promises to increase the competition between governments. Government economic policies are constrained by the ability of money to cross borders electronically. If a particular government chooses inflate its currency, capital will flee. A government can raise interest rates to attract capital, but it must weigh this action against the possibility of slowing growth.