Ill give it a shot. Its clear from the movie and from real life, the FBI and local law enforcement rarely share intel. So it would be unrealistic for the FBI to go to BPD and inform them that Costello was a snitch. By snitching to the Feds, he keeps them off his back and Costello had a snitch in BPD to make sure the state PD had nothing on him. Being a snitch for the Feds doesnt give you cate blanche to murder, injure or extort when it comes to state law enforcement and if he doesnt have a snitch in the BPD he runs the risk of having the state charge him.
Also, do you actually think that the state would share information with the feds when they are hesitant to share information within their own department?
Regarding Casino, I guess you wanted Deniro to sound like Woody Allen because I dont know how a half jew from Kansas City is supposed to sound. I also dont know how you could call Deniro's character "meek". Am I the only one that remembers the vice scene in Casino?

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