Here is, of course, the Who Owns The West? map.
http://strangemaps.files.wordpress.com/2008/06/map-owns_the_west.jpg
Federal ownership of so much western land is unconstitutional.
All states enter the union on the same basis as the original 13. No preconditions can be imposed on a new state other than those imposed on the original 13.
Hence, it was not legal to require western states to permit continued federal ownership of what were territorial lands, before granting statehood.
All those federal land reserves actually rightfully belong to the states in which they are located.
US Government is broke. They can sell all that land and be less broke, and also save the expense of forcing people not too use it.