Before this sails too far off on a tangent,
a.) Federal buildings are symbolic, and are thus deemed to be a preferred target. The reason they are a preferred target is that successfully attacking them shows the government to be weak; i.e., if the government can't protect itself, how can it protect its citizens? (Then there are those who have a grievance, real or perceived, against the government, but they are a separate case.)
The security enhancements are put in place to make buildings less vulnerable, deter attacks, and increase the likelihood that if an attack is attempted, it will be unsuccessful. As a result and as noted, terrorists now often choose 'softer' targets. But....... If TD North started sitting bank clerks with their cash drawer on a table by the door, one can predict how robbers will react to the opportunity.
https://goo.gl/maps/ZV2jPC6zRBz
^^^The street sign is at 17th and H streets in Washington. If the truck proceeds to go straight, it is quickly pulled over, and 'inspected', before being turned around.
The Federal government gets to say how things are done, because if indemnifies. There would be no nuclear power in the U.S. without the government indemnifying against a catastrophic event. In 9/11, the government indemnified, and thus spared the taxpayers of Massachusetts from having to pay many tens of billions in damages. (By far the lion's share of the damages of 9/11 came from the two planes that departed Logan. After two airlines had declared a liquidating bankruptcy, who is left to go after?)
b.) If the state, or city, and a developer were particularly keen on the O''Neill site, make an offer to the Feds to build a new O'Neill on Kneeland street in exchange for Causeway St.. Or Rudolph's [State] Government Services Center. The Feds might take you up on it.
c.) As for re-cladding O'Neill, it's not out of the question. Wait for another recession, a government stimulus program,and voila. The Massachusetts Congressional delegation has to be on-board though, and not half-asleep.