With the rise of the media worldwide and the instant transmission of news virtually across the globe, the state is becoming an institution relegated to bygone days. The nation state had an important role in the world before the world became so intermingled. Now, it is much easier for people to communicate with people and corporations rule the world, not the British Empire or any other nation that once ruled the globe.
The simple truth is that once people relied on their governments to interact on their behalf with the rest of the world. Now, people want to interact with the world themselves. There is no longer a desire to have diplomats or heads of state act as representatives of a country. In fact, many find that heads of state serve as an embarrassment and often do not represent the viewpoints of any of their constituents. For example, with the American nation as divided as it can possibly be, many Americans find President George Bush to be a bumbling representation of the country and express loudly that they disagree with his policies.
Bush is just one example of this. Many parliaments across the globe have concensus governments with more than one political party sharing the power. As such, almost no one is happy with all of their governments actions or stances. Instead, in a global world, people are more interested in finding people with like interests and beliefs regardless of nationality. In short, all politics might once have been local, but now they are global as well and it is just as likely to find a person 6000 miles away with similar outlooks as it is to find them next door.
Now, with the media access that is available worldwide, finding those people is easier than ever and the nation-state is a dinosaur waiting to fall into extinction.