Think of spaces as a hierarchical framework.  The people in the Neighborhood know which town they're in, and which state they're in.  Maybe they want to participate in the Town's affairs, maybe they don't. If they do, they can click that join button on their town or State... but it's not something they should be forced to do.  Then there's the case of being a member of a neighborhood in Town #1, but your home town is 1000 miles away, so you join that town as well.  Oops.... there goes your idea of what a hierarchy should be.  

Spaces just provide that hierarchical structure that glues all the different spaces together.  Consider this example for just one branch of a hierarchy : Space #1 is "Director of engineering".  The Director's space is parent to 5 child spaces belonging to managers.  Each manager has an average of 20 child spaces for employees that they manage.  In this case, should all those employee child spaces be added to the Director's space?  The short answer is no, because it diminishes the hierarchal structure.  Look at any org chart for any company on earth, and it will have the same structure as Spaces.  In fact, you could use Spaces to build a unique social media representation of the traditional organization chart, but instead of blocks on a chart, you have Spaces,   In this case, the entire structure would have to be managed so that its structure remain true to the actual hierarchy.  It would make an interesting network

In your case, members of neighborhoods are indeed members of towns as well as States, but they are bound by hierarchy, not just dumped on one big pile.