I would argue, along with what seems to be every court in the last 200 years, that it is NOT improper for the federal government to buy land, own it and use it. The land owned by the US never automatically transferred to the states upon statehood, and a number of states were created with the agreement that they would NOT EVER lay claim to the US land.
I fail to see how a state that agreed to the conditions of a contract can then completely reverse the terms of that contract unilaterally.
“The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.”
As far back as 1819 the courts were saying, “If the end be legitimate, and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may constitutionally be employed to carry it into effect.”
It seems to me that “make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States” is pretty clear, and establishing a regulatory body to oversee land owned by the US is well within the scope of the US Constitution.
It further is obvious that much of the land in Nevada and Utah was NOT WANTED for a hundred years, and even now sustains such limited grazing as to be commercially nonviable. The US tried to give the land away, and no one wanted it. Nor did open grazing work well. It was destroying what limited value the land had for anyone, so the idea was abandoned.
For Bundy to decide in 1993 that the US government has no authority in Nevada to make laws or to regulate anything makes Bundy a nut. We are not a confederacy of sovereign states with a government as limited as it was under the Articles of Confederation. Those articles were replaced by the Constitution.
"We think a proper examination of this subject will show that the United States never held any municipal sovereignty, jurisdiction, or right of soil in and to the territory of which Alabama or any of the new States were formed, except for temporary purposes and to execute the trusts created by the acts of the Virginia and Georgia legislatures, and the deeds of cession executed by them to the United States, and the trust created by the treaty with the French Republic of the 30th of April, 1803, ceding Louisiana."
(I have added the italics.) By the same rationale, the treaty with Mexico pursuant to which the land now constituting Nevada was acquired could be held to create a trust, because, again, it was never the original conception of the Constitution that the United States would have permanently large landholdings over which it exercised general sovereignty, even under the Property Clause.