Two problems with your idea....
1) Most western states do not want all the Federal land. They are perfectly happy allowing the Federal government to pay the costs of maintaining, patrolling and improving such lands. Some do want ownership of certain choice parcels but that is a very small percentage of the available land. You have to remember that much if not most of these lands were offered up by the Feds until the 1950’s and they couldn’t even give it away.
2) It has been estimated that if even 4-5% of Federal lands in states like Nevada and Utah were offered for sale to the general public, it would so depress the real estate market to a point where rural land would become almost worthless. Think about that...supply and demand...right now there is a demand commensurate with what is available (and many argue there is way more supply than demand). if you dump hundreds of thousands of acres of land into the marketplace, even over a period of years, you will burden the market with surplus land and drive down the value of private property to levels not seen in 75-100 years. You will bankrupt thousands of ordinary citizens.
This problem is way more complicated than most people realize.
And? How is that my problem? Sounds like it might be a problem for vested interests, but you don't stop reducing the size of government because there are problems.
It will all sort itself out, in the end. The Feds need to turn the land over to the States, regardless of all the concerns that the concern trolls have.
/johnny
One fellow here in Oregon wants the lands handed over to the counties. The counties can then sell off for development or maintain the lands as is for ‘green space’ or to sell timber. Many of our counties are struggling as most of the land is tied up by the feds, who are no longer managing it as a resource. That’s the main issue.