This all got out of hand years ago, the federal government encouraged ranchers to think of it as “their land” it was supposed to be a perfect relationship between the government and ranchers. Government would let ranchers use land that in some cases was claimed by rancher before the
BLM existed when the unwritten code of the west was secure water and you could use all the grazing land you could control. The relationship between feds and ranchers was a secure and solid one at that time, like a happy marriage- rancher invested money in government land for improvements like water that benefited wildlife and allowed that to flourish. Roads were built,fences were built, waters put in sometimes at total rancher expense, sometimes on a cost share but rancher generally always provided the labor. This benefited the government in income from leases (which were always cheaper than private leases because rancher was expected to and in some cases required to make improvements and steward the land, benefited the wildlife because water was readily available, benefited the general public because there were roads and wildlife that would not have otherwise been there.
The relationship between ranchers and the federal government was so strong that federal grazing leases were/still are in fact considered part of the ranch. They were considered that way by the government, by banks, appraisers, tax entities. Ranches were valued based on the grazing lease that went with the ranch. Because of this relationship there is no real way to compare federal grazing leases to private leases.
The relationship between ranchers and the government went sour years ago when liberals decided cattle were bad and we should all be vegetarians so cattle/ranchers needed to go. liberals started using endangered species, environmental issues- you name it to get ranchers off of government land. I have no idea when it all began for sure since there was no FR then to keep up with shenanigans but I know it was going sour in the 1970s in some places. Going back to water rights, some ranchers had legally filed water rights in some cases on land they did not technically own. In some places there is a distinct difference between land ownership, water rights, mineral rights, and those rights can be owned by different people. Some of the ranchers owned water rights on what came to be government land. A rancher here in NM got in a similar situation as Bundy and relied on his documents that showed his family owned water rights on government land before the government claimed “ownership” remember state rights were more important then than federal laws and states allowed this to happen. Google Kit Laney NM to see the issues he had with the feds. In some places the government filed for water rights that were already owned by ranchers and then passed laws that the rancher would lose his water rights for non- use and would then not allow the rancher to have cattle there to use the water- catch 22. It has all been very complicated legally over the years.
Upshot is the article that said Bundy’s neighbors had been regulated out of business but he held firm sounds pretty accurate as to what started this battle.
I have to thank my lucky stars that my father was so wise, and that he and my grandfather did not trust the feds. We never leased government land, my dad said the ranchers were going to get screwed at some point because they did not have deed to that land and any rancher that paid millions of dollars (which they did and still do) for a ranch that was basically worthless as a ranch without the government land was insane. My grandfather and dad never fell for the whole, treat it like you own it, include it in your ranch for all purposes way of ranching because they did not trust the feds.
Sounds like your Grandad and Dad were very wise men. I live out West (Denver area) and own mountain property as well. Like you mention, I have seen a lot of “ranches” that were small homesteads plus a large government grazing lease. Actually, it is not all that uncommon.
A wise man once said, “posession is 9/10ths of the law” so whoever owns the land gets to make the rules. It is kind of like dealing with a land lord. If he wants quite hours at 9 pm ... you are going to have to sign an agreement to that effect or be kicked out when your current lease runs out. Sometimes you have good landlords, sometimes they are asses. But that does not change their right to set the rules for their property.
What saddens me is that so many conservatives so quickly gave up the foundations of owners rights or property rights just because the fight was between someone they liked and the government. That loss of principle is what we accuse the left of so often.