But that's only one way of looking at it. The state is the IP and instructions/data. But what does that state represent? You could do the exact same thing with functional - freeze the machine, copy over all the algorithms, and restart it. A computer may be all state, but so is a rock. It's what that state represents that matters.

I understand where you're coming from, and to a certain extent I agree. When confronted by most real-world problems I have no idea where I'd start with a functional language. I just disagree that functional is useless. Witness the Lisp Machines (now dead lol).

There are certain other benefits to the elimination of explicit state: it makes automatic parallelization and concurrency considerably easier. This will probably become increasingly more important in the future.