I'm wondering on what linguistic base such a state would work. Growing up as a non-Jew in northern Yisroyl myself (I think the official figure right now is roughly 65% Jews, 25% Christians, 10% non-religious), I can state that daily life between Jews and non-Jews is quite normal because Yiddish is not too far away from German. But if they'd have founded a Jewish state down there, they'd somehow need to revive Hebrew - I don't know how that would work. Possibly the integration of Sephardic Jews might have worked better. They are still frowned upon by our mainstream politicians and by much of the population - Jewish and goyim alike. Jews consider them to be "not real Jews", while Christians (especially the antisemitic Bavarian Order of Virgin Mary) and atheists see them as alien "desert people".
Without Jewish immigration, the megalopolis of Bernburg-Halberstadt-Köthen-Halle (considered to be the "Silicon Valley of Anhalt") would probably be a bit smaller and more rural.