You're right. Such a contract as he was talking about would not be allowed under the federal constitution.
My understanding is that libertarians don't oppose the federal constitution; they want the federal government to stay within its limits, with includes the 9th and 10th amendments. And those amendments would (as they supposed to) make certain activities regulatable only at the state level.
They don't realize that to do that, citizenship would have to return to being established at the state level and the 14th amendment repealed, which would automatically make the states sovereign again with respect to the federal. And hell would freeze over before the feds did that, voluntarily.
Seems few people realize just how much change the war between the states made to the structure of government the founders set up. I think that's because only relatively recently have the feds begun to dare exercise the powers actually transfered to them in 1868. 