I disagree. It is "of the people" but it has a very specific purpose in the amendment.No doubt there is some obligation of a state to uphold the State, and within that would be its security as free. The recognized right to keep and bear arms is still of the people, not the state or the State. A necessary condition for a free State, that is, the only way a State can be free, is if its citizens are free. And if one might imagine otherwise, one cannot for a State of “We, the people” without violating sense so as to abandon all reason. But it wouldn’t be the first time.
However, the latter part is the more intriguing. To rephrase the premise, the States at some point surrendered their freedom to the Federal government by allowing the Federal government to overtax their citizens and then depending on the Federal government to grant some of that tax money back to themselves. While the ironic effect may be present, the idea that that freedom could be constitutionally surrendered without amendment is simply unconstitutional. But that doesn't seem to stop them these days.
Here's something pretty cool (in a bad way). I was over the military training program for new soldiers in Tennessee. NGB decided that all states needed to stop using MEPS for sending trainees to training because it was costing too much (some had to fly to MEPS, some had to drive long distances, etc.). I met with our leadership and said that we did not need to use that method because it did not make sense for Tennessee (we had three MEPS - one in Memphis, one in Nashville, and one in Knoxville). We could easily avoid the cost and pain of hiring people to operate a system that was already working well.
The federal government (NGB) said we, as a State, had that freedom. But when funding was sent out they would divide the funds going to the States that would not participate between the States that would - in other words, Tennessee was free, but if they did not submit then they would pay a steep price. We, of course, had to use the program.
Apply that to roads, public education, medical funding, whatever . States have become dependent on the federal government.
We are not even allowed to decide what is on the lunch menu at elementary schools independent of the federal government. There are no free states in this "union".