Why do states give up sovereignty?

The short answer is that states do not give up their sovereignty. The benefits of a Union being recognized, states may acknowledge their joint agreement to a common system. In the United States, the individual states ratified the Constitution, which mandated that the signatories could not restrict the rights of citizens under that document, nor contravene the powers granted by it to the Federal government and courts. Where state laws conflict with Federal Laws, Federal courts decide which party has the Constitutional authority in that specific instance.