The problem here in the US is that Alabama has much representation in the Senate as NY state.

That's how the Senate is supposed to work.

That doesn't mean it isn't a problem.

If California wanted more representation in both the Senate and the House, it could divide. Instantaneously the population of California would get 2 Senators and probably a large number of House Seats. Further, it would help with the political divide in California: coast is left, farmers are right. You don't see California, as a political entity, chomping at the bit to subdivide.

As to the particulars of your comment, States should have far more autonomy than they do under FDR's federalist system. States should be able to tax more, but with the Feds already eating 20-50% of the populations income, States have a hard time raising funds. If we weakened the feds, but first paying down the debt, Alabama might have a far more interesting economy.

California would likely divide itself in a way to advantage the current politicians that govern the state. Not really Gerrymandering as we know it, but a similar principle.

Republicans would obviously not accept this. We would likely replay the decades leading up to the Civil War, where adding states was a contentious and at times violent process.

The feds would also have to approve it. If Republicans can stop it, they will. If Democratic politicians can push it through, they would likely get blowback from moderates. Republicans would get power and seek to balance or even advantage themselves. We could end up with eight Dakotas (just kidding on this specific example; other Republican states might want to split too).

This is not a fight either party wants to start because it could be a disaster for them. The intended outcome (increase relative Senate representation) has slim odds and a high cost.