We are too dumb to set our own standards!

It's not about being "too dumb". It's about having skills that transfer across state lines. There's a reason we don't let doctors and lawyers from other countries just set up a shop and start practicing in the US without meeting American standards first. Now imagine that happening from one state to the next. In your naive attempt to reduce the size of government, you've actually increased government bureaucracy and red tape by orders of magnitude.

And again, where are states going to make up that 15% of funding provided by the federal government?