Okay, first of all, governmental set-ups are way way overrated. A government in which one person has ALL the power can be better than any government that we've seen, so long as that person does the right things. A government in which EVERYONE has the SAME powers can be just as good, again, provided that they do the right things. Now, people will try to rig governments so that it sits in one way or another, but there are invariably other people rigging things other ways, and generally, when you close one door, you open another. No system will make everything perfect by itself (though there are lots of systems which essentially ensure problems....). But I really don't care what's democratic or not. Who cares? I mean, seriously, why does that matter. I care about what's right.
Having said that...
I'm a big fan of unitary governments. In fact all the problems that theory is pointing to as endemic of these systems, I find with the kind of federalism he's advocating. Obviously, I don't really want congress deciding when my local schools should start. They don't know anything about these kinds of problems. But at the same time, neither do the people in the state capital (gasp! I don't live in or all that near to my state's capital, I'm giving out as-yet-undisclosed personal information!). Of course, I'm not really sure that the local school board does either. In fact, I'm pretty sure they don't. But I guess they have a better chance than the other groups. Now, who has the power there? The state, actually, has the power over this. Why? Really, there's not a good reason why you need state-level governments. Have a national government, they sublet local decisions to local groups, maybe lots of decisions, on a case-by-case basis, but if those local groups screw up, they can take back responsibility and power.
Take a look at the health care law "Obamacare" (though I hate that term; why do we always have to slap politicians' names on things?) that's going through right now. The argument against it is that the national government doesn't have the power to do that. Ok. I don't care. (Well, actually I think they probably DO have the power, but like I said, I don't care). I really don't. SHOULD they have the power to do it? Of course they should. They're the national government, this is something that's very relevant to every person in the nation, this should absolutely be in their domain. Indeed, I don't really see how the state level is going to do better (oh, I mean, they can come up with a better law for sure, and some of them would; but this has nothing to do with them being states as opposed to the country, really).
There's local issues, and there's national issues. It only makes sense for the national level to determine which is which. (Actually, there's local issues and global issues - ideally you have a united... universe, say, and you have local v universal issues, but we're a LONG way from that...).
Okay, so let's look at your beaches example. Here's the problem. "the NJ representative is going to want more than just $x, because he's no longer bearing all of the costs." There. Right there. Now, this isn't a problem with the system, it's a problem of greedy, selfish people. You can have a national system where a local group is like 'hey, we'd like to do this local thing, all these people have agreed to pitch in, let's do it'. And the national people are like 'ok'. And so they benefit from it, they pay for it, you're fine. Now this sounds like it's federal, but it's still unitary. I'm sure you know this better than me, but lots of Europe is like this. UK is like this. You can have the national people try to get into the payment for all this stuff, who's putting what money in, who's getting what out... they can do this, potentially, we're looking at something increasingly close to communism here, but it will be very hard. More generally, what you do is, people bring up a New Jersey sand beach thing. Ok. National people figure out where it's localised to, make a specific bureaucracy for that problem, give them some parameters, go. Boom. Not that it's easy, but... states really don't do that better. I'm in New Jersey and on the beach, I'd want $Q improvements. But my rep goes to the state and asks for more than $Q, because it's not just my beach area that's paying for benefits that only help my beach area.
