I think the reason why the federal government owns so much land in Nevada, is that nobody ever thought that land was worth homesteading or buying. The US government still has title since taking it from Mexico. (Who took it from the native people.)

Outside of the original colony states, land titles typically go back through multiple subdivisions to US government ownership. If it was not "owned" by the government to begin with, how would anybody prove that they held a valid title? I'm sure Bundy's ranch title can be traced back to a federal land sale or grant, and that is the basis of his claim on his parcel.