I think that the reason why Federal Government attempted to return domestic policy back to the states is because of efficiency.
It is more efficient to delegate powers to the states to deal with issues and conflicts within the states because state leaders can see firsthand on what these issues are and can immediately propose and act on solutions to resolve these issues.
There are 52 states in the U.S. of A and the Federal Government can only decide on laws that can be good for all. They can't individually monitor these states to see whether the laws are implemented as it should be. Thus, they need to delegate powers to the state to act in their behalf at the same time acting for the benefit of the people living in the state.
Through the 1950s, most regulatory programs enacted by the national government fell into the category of economic regulation.
