Just One reason states may not be negotiating to reduce sales load follows up on Mark A's comment on the advisors as the distribution force:
I might only be able to bring in a few thousand $ into state X's 529, so my compensation is based on the front/back sales charge. The same is true for other advisors helping people invest in that same 529. So even though $2 million might come into the plan, the individuals in the sales force do not benefit directly from that large asset base.
Reductions can come in instances where one advisor or a small group brings in $million$+ or contracts with a company 401(k), the compensation from assets under management may be sufficient to permit a lower up front sales charge.
Addendum on Sales Charges/Advisor Compensation: I will never tell clients that my advice will give them a higher return %. For some that want want a warm body to ask questions about FAFSA, EFC, comparisons, distribution order, overlap w/retirement and a host of other questions they may not know to ask - that's where advisors fit.
Many on this board are here because they are willing to research, read, evaluate and prefer to make their own decisions. There's a spot for everybody.