Actually, I don't think that making Iraq a federal state was feasible even then. Sunni and Shiia were not in a state of civil war (a large portion of the population would thus be against such a partition), and keeping Iraq in one piece was necessary to placate Turkey. Anyway such a partition would require some sort of referendum - and would provide Iran with an instant ally in the region.

Not to mention that the redrawing of borders and the creation of a Shiia state in Iraq, would raise the question of why, say, the shiia minority in Saudi Arabia shouldn't enjoy the same independence.

Plus there something inherently unstable about city-states. They become objects of desire for competing nationalisms too easily (and internalize interethnic tensions outside them). In the case of Kirkuk the real fuss is about the neighbouring oil-fields as much as it is about the city itself...

The road of excess leads to the palace of wisdom - William Blake