It's nothing to do with a lack of national pride, the fact is the unions in the North do not have the clubs interests in mind when it comes to test rugby.
For example, the England Elite squad players are away from their clubs for up to 14 weeks out of a Premiership season. When there are only 24 rounds in total that's a significant time away to have some of your best players missing; Especially when a lot of these clubs are businesses that rely on the money people pay to watch these players for their financial survival - forgetting of course 2/3 of the season with your best players missing means your status as a top flight club is needlessly put at risk.
The RFU are a good example of sport governed with the Bernie Ecclestone mentality - "It's my toy and I'll play with it as I please". Similarly to Ecclestone, Baron and the RFU have been plotting for some time a way to undermine the clubs with the regional 10-franchise system, ring fencing the Premiership and central contracts in a manor which makes Silverstone losing its Grand Prix to Donnington Park look fair.
There could be a case for the regional teams, ring fencing and central contracts; The Magners league had reasonable (if wavering) success while the Super 14 has enjoyed a large following for a while. However because of the history and rivalries revolving around most of the clubs is as old as test rugby itself, the idea of merging, say Leicester and Northampton to form the "Midlanders" would fall on it's backside as nobody would ever support it. The support of the club fans are the heartbeat in English rugby and they simply would not support another plastic team with anywhere near the same passion or feverishly. Interest would dwindle and the sport would slowly die.
While Test rugby is a spectacle, far too much emphasis is put on it as a rival to football in world popularity while forgetting that the game at a human level (which top flight non-test rugby still is) needs to develop and expand for the good of the game. Yes, that will mean that eventually players are paid stupid money and yes the amateur ethos will eventually vanish, but that's part and parcel of professionalism.
If domestic rugby was promoted properly and turned into a 30-40,000 attendance spectacle week in, week out at each club [blink]-not pre-fabricated franchises-[/blink], which would be a piece of **** if the union really wanted to, and the National team was taken away from the corporates and given back to the fans, Rugby wouldn't need all these silly "club vs country" debates or ideas of ELVs and Orks needed to improve the perception of the game. It would become a self sustaining powerhouse in worldwide sports, up there with Football and Gridiron on a worldwide scale. The improving rugby would come with that.
Of course, in it's current state the pointless tests are played, the clubs get screwed over, the unions pocket a lot of money and the players are burned out and never properly developed. The sport's never going anywhere like that.
The FFR, IRFU, WRU and SRU all have their own problems also, but I don't fully know the ins and outs of them.