I agree with you that a completely rural state with no substantial population centres at all would probably struggle economically. I think however, that there is significant wiggle room between carving out a metropolis that is big enough to be a state in its own right, and leaving a rural area with no demographic focal points.

As can be seen in the next post on local government, every state does have at least one “city” district within it. Deira has York and Hull, Kernow has Plymouth and Exeter/Torbay, Ulaidh has Belfast and Sussex has Hastings/Eastbourne (as well as Basingstoke, which I didn’t give its own district as it was slightly too small, but is nevertheless a fairly significant population centre in the region).

This is a fairly good reason for Cornwall itself (exceedingly rural, only 500k population) to not be its own state, but if you were to combine Sussex’s 1.64m people with Solent’s 2.48m to give you a state with a “mixed character” of highly urban with highly rural, it would mean that the people of Brighton, Portsmouth, Southampton, etc. would significantly outnumber the people living in the rural Downs and Weald. This disparity would naturally lead to the state prioritising investment in the cities, and even if a lot were devolved further to local government, it would be easy for the state government to earmark funds for “critical infrastructure” that still predominantly favoured the cities.

From what I can tell, the brain drain you describe is already happening, and has already accelerated in recent years. There are many reasons for this, but a big one has to be the chronic underfunding of rural services and infrastructure. Even if a rural state were dependent of federal funding, that is at least their funding to use. As part of a state containing a metropolis, rural areas can easily be starved of funding without it being obvious, as the state as a whole still has plenty of money. From a “Return on Investment” perspective, it is always going to be easier for a state to justify spending its money in cities, after all, that new road they’re building will benefit so many more people than the other road they could have built in “the middle of nowhere”.