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If the FBI is working on crimes totally within a state, why bother having a state? Why bother having state police? Why bother having governors and legislators? There is probably some unconstitutional overreaching federal law allowing them to investigate this crime, but why? The federal government is too big and this is a symptom of that condition.

If the FBI is working on crimes totally within a state, why bother having a state?
You are aware that there are federal laws and State laws aren't you? Answering that question should give you an idea of how to answer your own question.
Why bother having state police?
Because they're necessary to enforce State laws.
Why bother having governors and legislators?
Article 4 Section 4 of the Constitution.

OH! I just realized...those were rhetorical questions? Sorry.

If the FBI is working on crimes totally within a state, why bother having a state? Why bother having state police?

1st reason. If the FBI does not do it, it won't get done. Live boys or dead girls in the bed of one of these powerful state pols will not get the attention of the politicized State Police bureaucracy. The PA State Police for the most part hand out tickets, bust low level drug dealers and cigarette smugglers, answer calls way out in the boonies where there are no local cops and supply some extra muscle to back local police when needed. They are not high end crime busters by any stretch of the imagination.

2nd reason. There are most often Federal monies involved in these scams, making it a "Federal Case."

This is not a states rights issue. Everyone in the state knows that Fumo is dirty, but he isn't stupid either. It will take some serious resources away from local political pressure to finally nail the SOB.