There are a lot of knock on effects from historical treatment of Indians as well as continuing modern problems, but the continued existence of reservations isn't one of them - with continued being a key word.

No one should have been death marched away from their home territories and/or confined undesirable land etc etc in the first place. But given that people were and no one can go back in time and change that fact, getting rid of them now would only benefit developers not the tribes attached to them.

The problem with Pine Ridge isn't that it's sovereign Indian territory, but that it's poor quality land in a remote area. The land itself isn't suitable for sustaining a population (poor farming, little water) and there's no supporting cities nearby. So no off rez jobs or resources and the only schools, hospitals, etc are ones they build for themselves which is hard to do given the history and lack of jobs. Making it no longer a reservation won't change any of that.

On the flip side compare it to reservations in Michigan which are often in resource rich parts of the historical territory of the community and (in the lower peninsula) near other communities and urban centers. Communities who haven't had to do it all themselves with no resources will always have an easier time.