We’d end up with 200 states at least. Such a horrid idea.

Adopting a party platform that would appeal to more people is simply out of the question for the American Nazis. Too many of the "wrong" sort of people might be interested and start demanding a place at the table. Better to just adopt the expedient of letting government officials choose their voters rather than all that messiness that attends the voters choosing their government officials.

Aren’t property, income and sales taxes from Arlington and Alexandria essentially funding the entire rest of the state?

the fact that re-organizing state boundaries is now considered a semi-viable election strategy to entrench Republican power terrifies me.

If they could forum their own states or become part of blue states the economy of red states would entirely collapse.

Sure. Kick out 99% of your tax base to Washington, DC, and make DC a state. That would work best for Democrats.