Nations are peoples. States are expressions of monopolistic force used on behalf of their people. (realistically often against them) Sovereignty is the recognition of that authority by other people, nations, or states. Nations have various customs, flags, and creeds, but the only legitimate purpose of the State is to secure the private property and lives of its people. If the individual right to life and property is not seen as immutable and respected above all else, the state could arbitrarily redefine those things and decide to not protect unfavored citizens' rights, in which case it serves no legitimate purpose. Libertarian thought tends to cut off where "collective rights" end and "individual rights" begin, but there's a spectrum between those want to maintain sovereign nation states more-or-less as they are today only with more voluntary participation, and those that believe the only borders anywhere should be private property borders. The latter viewpoint is generally seen as an ideal, but not practical. In either case national sovereignty ultimately serves personal sovereignty, even where individuals are blood and honor-bound to nations.

(he did say "ideal", so I assume you're asking him about the theoretical framework and not geopolitical reality where tyranny reigns)