Management of the land is sometimes an issue. But overall public land has been put to good use where it has economic value. It provides income for the treasury and opportunity for homesteaders and small miners, to name a couple of beneficiaries. On top of that you have public recreation and wildlife protection.
There is nothing unconstitutional the government owning land. The Constitutional prohibition refers to government-owned land being constituted into a Federally-governed entity, with the exception of land set aside for a national capital city.
If the states want ownership of all the open public lands within their borders, let them press their congressional members to pass a law transferring ownership to them.