"Only the federal government can provide the funding needed".?
NSF fields 40,000 proposals per year, 110 per day.
The US is unlike other countries. By design, each state has their own capabilities, and owns everything except that which is specifically provided to the federal government. The combined capabilities of California and Massachusetts equal the remainder of the country. There's nothing to prevent any state from funding the universities in their states.
Was it more convenient before? Sure, but there is now an inflection point where more than 50% of the country "don't like you and wish you weren't here". You don't have to get beat up at the bus stop if you walk or take an uber.
This is hardly unique to research or higher education. All 50 states have negligently constructed budgets to rely on copius federal funding for health care (Medicaid) and education. That makes it easy for a petulant politician to kick sand in your face and "disrupt" that.