I disagree. The federal distinction is mainly for federal taxes. The state is not just concerned with taxes, it's also concerned with other labor laws, so it may need to distinguish differently.

I mean, you would need both right? You want consistent tax treatment the whole way through and obviously state worker protections would be the main thing. What am I missing?

I don't see why that's helpful. W2 employees would be treated the same as now. 1099 employees would be treated the same from a federal standpoint, but separated into two groups from a state standpoint.