That article you cite refers to Territories. A State is not a Territory. The LAW I cited refers land inside States.
See the discussions of the territory of Puerto Rico becoming a State to see the difference.
Once its a State the land is owned by the State and the Federal Govt is required to purchase it from the State with the consent of the State for the limited purposes as stated in Art 1. Your argument nullifies the specific language of this section and thus has no merit.
You know you're not the first person to latch on to this theory. Many have tried and the Supreme Court has shot them down on every occasion. There is nothing illegal about government owning land in a state.