Even if what you say is true, its irrelevant. Its the government's land. They can use it for any legal purpose. They don't have to get this guy's consent to use their own land as they see fit.
It is not that simple as it seems. Bundy's family were the first European Americans to ever settle on that land, after defeating the Shoshone. The government used the services of that family to defeat the Indians. And in return, they were granted grazing rights to the whole area. How can the government take away something that was granted many years ago?
I would like to read the document that shows these grazing rights were granted free and forever. Link?
Edit: Also, was this document presented to the federal judge that ordered the cattle be seized?
If such document exists, it is probably in an archive in Clark County Nevada or on microfiche somewhere. I doubt it's been put online. Most recorders' offices don't even have records from 1980s online yet, let alone 1880s. The Taylor Grazing Act of 1934 has language stating that nothing in a permit issued by it would confer title, etc.
As for what has been brought before a federal judge, I haven't read those cases yet. I'm sure they challenge the BLM's right to manage federal lands and I'm sure the federal judges will always uphold that right since the BLM was created by an act of Congress, likely via the Interstate Commerce Clause of the Constitution.
Once Bundy quit paying those fees and the BLM wanted him off the land, the clock started ticking for a claim of ownership via adverse possession. The timeframe required by Nevada law is 5 years and Bundy has been adversely possessing that land for 20 years. If he brought a claim of ownership before a Nevada state court, he would likely find that the court agrees with his assertion that he is entitled to do so under Nevada law. Since eminent domain is a state right, Nevada would be within its right as a sovereign state under the US Constitution to transfer that land to Bundy if the court ordered it to be so.