Michael,
Sounds like you have a big-bang theory of government encroachment that suddenly appeared in the late 1880s and early 1900s. But the roots go back much farther than that.
Many early republic statesmen believed the Constitution was dead by the 1820s. Even James Madison, the “Father of the Constitution,” believed the Hamiltonian camp had turned the U.S. into a modern-nation state. (For this reason, people think there is a “Madison Problem”–an inconsistency in Madisonian thought. But there isn’t. His support of the Constitution in the late 1780s and favor of states’ rights as President reveal that many in the US had dismissed consitutional barriers.)
And much of what you mentioned as problems under the Articles, occurred a few years later under the Constitution. Of course, small governments can be as oppressive–if not more oppressive–than large governments. But people in a smaller community–especially during the 1800s–are more likely to be similar in religious beliefs and political ideologies. And if they aren’t, they have a better chance at expressing and having their views heard than in a more populated and larger place. OK, let’s say there is a small government that’s dictatorial . . . well, let’s just say people are more likely to speak up to a 5’3″ jerk than one the size of Hulk Hogan!
That said, much can be learned from the Federalists, but let’s not forget about America’s co-founders: the Anti-federalists.
