I like the part that makes the travel permissible if it involves some sort of government grant. "We have principals until it affects our free cash".
Sounds like they just don't want their state's money going to those states, in order to influence legislation at the state level, rather than the federal level. If it is a grant, it isn't their state's money, so I don't have an issue with that. Now, if it was a true travel ban, I'd probably raise issue with it, but eh, if they feel that way, then why not, it's their state's money.
In fact, even if I'm not an advocate for this particular cause, I actually think this model is a great idea. Instead of legislation at the federal level, states could use a similar model to influence adoption of legislation/ideals in other states, without actually forcing that state or the nation to adopt it.
I'm actually a big believer in state's rights, and if we did more at the state level, rather than the federal, we could see real-life examples of the successes(or lack thereof) of policies and laws in 50 different states to draw real-life data from, to make decisions, rather than fly by the seat of our pants to insist something works based solely off theoretical concepts. I also think, it is a shame, in this day and age, people are not applying our technological advances to make decisions based on facts and figures we have readily available.