The bit about sovereignty is pretty galling, since state sovereignty is now the most promising legal strategy for shutting down the surge altogether. Miller is just goading at this point. Rumor has it he got shut out of the meeting at the White House where they tried to figure out the next steps. Li'l Nosferatu might also be on thin...ice—not because he got two innocent people killed (Republicans don't care about that) but—wait for it!—because he made President look bad.
The Bondi letter is what did it, legally speaking. Normally a state sovereignty argument would be a hard sell in court against federal operations. This is especially true in the 8th Circuit, which is just behind the 5th Circuit for conservative craziness. You have to let federal officers operate to an effective degree. That's how federalism works. Therefore trying to tell a federal judge that federal officers don't belong in Minneapolis isn't going to fly.
But then along comes A.G. Pam Bondi who not only says the quiet part loud, but puts in writing and delivers it officially to the governor. You couldn't ask for any better evidence in court for the proposition that federal officers are not there to do their federal duties but to bully the state into complying with policy preferences. The specific things Bondi demanded in the letter were all things the Trump regime had asked for officially, but had been told by courts they were not entitled to have. That makes it worse, since they're obviously trying to get things they can't have by means they shouldn't be using. Normally you have to scrape away at tidbits to prove someone else's intent. Bondi handed it them on gold-leaf letterhead. She bumbled her way into making the best sovereignty argument in Minnesota's favor that one could hope for.