It is generally the case that children (and even many adults) are more interested in studying things that have a clear relationship to their own lives. It is for this reason that elementary school students benefit from studying states and regions.
By studying these local subjects early on, students are introduced to social studies and historical concepts in a context that is more interesting to them. They learn about them in the context of places that are familiar. This allows them to have an easier time learning and caring about these concepts.
Once students learn skills and concepts in this way, they are more ready to move on to other areas of history and social studies. They have benefitted from having a foundation laid for them through their study of their own states and regions.
Elementary students are unlikely to have a firm grasp on a world beyond their own states or regions. They stand at the center of a circle that can be added to only gradually. First, really, should come neighborhoods, then perhaps a municipality, and then the circles can expand from there. This allows elementary children to develop a sense of community in baby steps and a source of local pride. Once this is established, ideally, elementary students would be able to expand their horizons to become full-fledged citizens of the world. I have also included a link that discusses other reasons that geography in elementary school is important.
Elementary students often do not have a grasp of just how large the world can be outside of their city. Most have not had the experience of travel as older students have, so learning about the different regions of the country and states brodens their horizons.
It is also beneficial to study other states and regions early on in school as it lays the groundwork for future studies in the higher grades. A student would not have any concept of the economic structure of the southern states in the 1800's if they didn't know which states comprised the south.
Learning about geography early in school also helps students understand about the history of their country. We are all more interested in concepts that we can understand and know the vocabulary of. For example, a student would be more interested in the White House if they understood where Washington D.C. actually was and why it is important.