I don’t think this is a great idea. I find these sort of location-based pages tend to be very thin and have useless content – really just the same content with only the location changed. This leads to hundreds of spun, thin pages. Remember, the Panda update was about trying to clamp down on these.
If you can genuinely create a useful, engaging piece of content targetting each location – great. For example recommend writing a blog post that includes the state or location and making it a really good piece of content: ‘The 10 best xxx in NSW’, ‘Top xxx to visit in Sydney’. That way you’re solving a customer problem, positioning yourself as an authority, writing shareable content and covering of the long tail location keyword phrase.