You're an idiot.
For one, Duke/UNC don't always play in NC. Frequently they've had to travel to Maryland or New York or New Jersey or Atlanta for their early round games. The pod system created to keep teams near home has only been around for a few years.
And playing in-state ain't an advantage anyway when 90% of that state hates you (Duke).
Anytime UNC/Duke play in the same building, the UNC fans will stick around just to mercilessly boo Duke. Remember when Duke lost to VCU a few years ago and the crowd was pulling so hard for VCU in crunch time? UNC fans.
And plenty of teams have had "in state" advantages. Florida has gotten to play early rounds in Tampa, UCLA/USC in LA, Purdue/IU in Indy, and Texas/A&M/TTech/Baylor have all gotten to play in Dallas or San Antonio or Houston.
Duke and UNC have the most Sweet 16 appearances because of coaching.