I think what Bandow means isn't that we need a breakup of the union, but rather a constitutional convention. I can't, however, imagine a revamp of the constitution in which Washington gets less power. Washington is already really good at imposing its will on everyone, without regard to whether the authority they're imposing is permitting by the constitution (because they do it with taxes--"implement this law or you forfeit dollars," as opposed to just legislating the thing itself).

Personally, I don't think parochialism would be much better for most people. Fiefdoms, historically, haven't worked out well for the little guy. I think I'm one of a relatively small minority who think our problems aren't as big as they seem (or rather they're as big not not as intractable). I think some much needed tax reform could go a long way toward solving America's economic stalemate, though surely it wouldn't do much for overzealous foreign interventionism (of course there are as many arguments for as against interventionism).

All that said, if the South did rise again, I'd come down strongly on the side of "let them go," with a grace period for anyone who wanted to move into the union and retain their citizenship. I don't think a second civil war would be worth it to anyone, and I sure as fuck wouldn't fight it.