Actually, while the fuel is in fact depleted and therefore virtually useless to a terrorist trying to create a nuclear bomb, it is in fact MORE radioactive now, depleted, as fission products, than it was as un-fissioned Uranium 235 and 238. And you are absolutely right. It is going to federal land; Nevada can refund the billions of dollars of federal welfare it has received, if the state wants to complain.
It is true that "fresh" spent fuel has a higher activity inventory than fresh, unburned fuel, that is only the case for a relatively short time. What a lot of people don't understand (but evidently you do), and what doesn't get told in the lamestream media, is that after a (relatively) short decay time, on the order of a thousand years, the activity inventory in so-called spent fuel is actually lower than that of the mined material. That is because essentially all of the fission products have decayed out, and you've burned out some of the 235U and converted some of the 238U. There's still stuff in there you'll want to isolated from the biosphere (assuming you don't reprocess it), but, from a radiological viewpoint, the "body burden" of the ecosystem, if you draw the control boundary at the outer edge of the lithosphere, decreases with time.
And you are absolutely right. It is going to federal land; Nevada can refund the billions of dollars of federal welfare it has received, if the state wants to complain.
You know, Nevada is a state with a sizable gaming industry, so if we can borrow a phrase from that, if Nevada plays its cards right, they could really come out ahead on this. For a facility that represents very little real risk, they could make a case to the feds that, hey, we're doing our part, what's in it for us...?