Well, State's Rights screwed the south during the war, big time. Especially for things like national defense, you need all of your member states to be pulling in the same direction. The Confederacy, however, did not. There are numerous cases where states would act in their own self-interest in ways that hurt the Confederacy overall as a whole. One example is the situation with the Georgian uniforms. At that point in the war, the majority of the confederate soldiers were dressed in what was largely rags. Georgia, however, was sitting on a warehouse full of tens of thousands of fresh uniforms. They refused to turn them over to the confederate army, however, because they insisted that they only go to troops from Georgia. Also, 1 or 2 states even threatened to secede from the Confederacy during the war.
So, while I do agree that there is a definite need for state rights to a certain degree, those rights only go so far, and must be matched by federal powers to unify national effort, especially in times of crisis, or for such national issues as defense, trade policy, etc. etc. etc.
-Arlos
PS. If you're really interested in a good view of factors that led up to the Civil War, may I once more recommend Ken Burns' documentary on the subject? It's not comprehensive, true, but it is indeed excellently done and provides a ton of information.