To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square)...
I've never heard of this paragraph of the Constitution, being utilized to circumvent and limit the Constitutional power of the federal government. Quite unique, but of course, quite wrong. If that was case, we wouldn't need a Congress.
The last paragraph says it all.
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
The Constitution was designed to limit the power and authority of government from despotic fiat and not from a free citizenry. Not from a free people, capable of governing themselves, through specific legislative procedures, which are laid out and mandated, with brilliant checks and balances, that serve to moderate majority passions of the day.