Civil war re-enacters do serve a purpose, in that whenever someone wants to make a movie featuring battle scenes from that war they always have a large group of extras with their own uniforms that they can use. But outside of anyone filming the re-enactments it seems a bit grotesque to recreate (in a "nobody is actually going to get hurt here" sort of way) the most brutal fighting this country has ever seen. Mind you, I can certainly sympathize with "playing war", having done that a lot as a kid, though it got a lot less fun when my brother insisted on us being an Army field hospital instead of combat infantrymen and you know what's a lot of fun? If you guessed "pretending to be an Army medic in the woods of Westchester when you're 8" then I'd have gladly traded places with you back then.
The fascination with the Civil War is particularly strong here in Virginia, where the boulevard I work on is named for Robert E. Lee and there's a Jeff Davis highway nearby. The Lee thing I sort of understand, as Lee (and his ancestors) were prominent in Northern Virginia since the time of the Revolution, but Davis was a Kentucky native who settled in Mississippi. His only connection to Virginia was serving in Richmond as the Confederate president. So clearly this isn't so much about "local pride" as it is "Confederate pride".
I figure the key reasons why even today (150 years after secession) there is so much pride in the Confederacy are as follows:
1) It was a long-shot lost cause from the get go. With less population and industry than the North and West, the South never really had a chance. With better generalship, the Federals should have been able to take Richmond within months and swept into the other state capitols by mid-1962. There is always a certain romanticism about a cause that was hopeless from the beginning.
2) The whole thing might have been a minor event (along the lines of the Whiskey Rebellion, perhaps) if the Federals had only been able to crush it early. Instead, with better generals and more motivated soldiers, the South was able to rack of an impressive string of early victories that extended the war and gave the Confederates hope that they might actually win it. Indeed, their only chance of winning was if the North gave up or foreign countries brought pressure for a truce.
3) There's always something appealing to people about "rebelling". Who always looks more dashing and heroic in popular culture? The James Deans, Marlon Brandos and Bugs Bunnys are always standing up to authority, and regardless of the rightness or wrongness of the cause it's always cooler to be the pluckish upstart. (The fact that the Confederacy was also preserving a more conservative and unyielding system of oppressing slaves is generally downplayed or overlooked by those extolling the Confederacy--which is to be expected, because it's hard to reconcile fighting central authority while siding with another type of oppression)
4) Let's face facts, the Confederate battle flag is just plain cool looking from an aesthetic point of view. It's a freaking red field with a slashy "x" running across it! The only thing that would make it cooler looking is to add a sword and some flaming skulls.
5) The South just had some terrific Generals, most notably Lee and Thomas "Stonewall" Jackson who beat stiff odds on many occasions against forces that by any measure should have wiped the floor with them. Even lesser known southern generals like Nathan Bedford Forrest and Jeb Stuart were able to do significant damage against superior forces. While the North's two best Generals--Grant and Sherman--get their due, their reverance in the North and West just don't compare to how the South treats their generals. This is in part due to Sherman being best known for a march across the deep South that was arguably a series of war crimes, and Grant generally operated when he had overwhelming odds over his opponents. Reverance for your generals makes it easier to personify your cause.
This mostly explains why the Confederacy still remains popular among a lot of southerners (and strangely, some northerners, who for all they know are descended from soldiers killed by southern bullets) despite the fact that the Confederacy was an awful time for the people who lived under it--constant shortages of everything, long death rolls, ultimately bluecoats romping through the land destroying everything they could--and despite the fact that the cause was built on a defense of slavery. Perhaps though, in the spirit of accuracy, the Civil War re-enacters will go several days without eating (and even then, only eating hardtack), use only 1860s medical techniques for treating their injuries, and come home to find that their house was burned down.