1) Why should any government agency have any greater right to confer the property of the deceased to anybody else better than the deceased himself?
No idea, but there was no clean solution. Oftentimes that grantee didn't even take possession of the property.
2) Why not just let whoever hasn't claimed it to homestead it? Wouldn't the heirs have a greater claim to the property than anybody else?
Yes, and that is why the heirs actually got to keep a clean title to the portion of the property that they were granted in the will, so long as all of their siblings got roughly the same. The property just couldn't be transfered to a single heir. If there was only one heir, or if there was only one heir that the grantee actually liked, a portion of it could be donated to an intitution. I'm not positive, but I believe that MIT got it's land grant like that; Yale, maybe.
3) Why shouldn't wills, trusts or other types of bequeathing documents have any force and effect?
Because the grantee didn't own the property, because the king of England didn't own the property. The king of England never had the
right to grant a deed to begin with. It was unowned property, as far as the young US was concerned. Again, it was a compromise in a situation that couldn't be resolved within the normal case law or British Common Law in any clean manner. They literally did the best that they could.
4) Does the person have to "deserve" something before he can receive it? Gifts fall into this category.
Not at all, but the giver must honestly own the gift. You can't steal a pie from your neighbor and then give half to your girlfriend, it's still theft of a whole pie. The argument that this land was stolen/claimed by the king, and taken from illiterate American Indian tribes was never presented in that time, but it's true enough even though most of those tribes were long gone or long dead by the time that it was an issue for the young republic. Do you understand that the heirs actually did get to keep the property?