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It's not a "legal philosophy" that's how states work (i.e. it is their land). The state always controls all the land within its borders.You're confusing ownership with control. Ownership grants but does not guarantee control [1].
Countries nominally control the territory within their borders. In this case, the state is also legally entitled to certain rights pertaining to the water. (Similar to how a homeowner is entitled to certain rights pertaining to their property.)
Neither the U.S. nor Pennsylvania purport to own freeheld private property. That means they aren't entitled to it. And aren't entitled to exercise unlimited control over it. If the answer is well it's only pieces of paper that delineate that divide, then sure, but it's only pieces of paper that delineate a state's border.
> If you 100% truly owned your own land you'd be the monarch of your own state
Again, control. In many monarchies, the monarch controls a legal entity that owns the lands of the state. Or is the legal represenative of a deity who is the legal owner.
[1] https://link.springer.com/chapter/10.1057/9780333983898_3
