Who is denying the rights, they can enjoy the same rights as every other Indians for J&K and as pakistanis for the area under pakistani rule. I am going a step forward saying they might be given dual rights and priviliges for empowerment.
Independence, you cannot form a an independent kashmir today sandwiched to military giants, any one can one day just walk in and engulf it given the history of the land.
Pakistan has all it waters in kashmir does, it want a third nation called kashmir calling the shots, china to pakistan links are from kashmir, will pakistan let a another nation control it trade routes. Kashmir has borders with two indian states will india let a third nation sit on top of its water resources too.. Realistically speaking it is impossible to carve out a third nation out of kashmir.
As far as ramblings of dividing india into small states... its is wishfull thinking of people oblivious to the reality, if you want to bring in insurgenceis in india to promote your viewpoint, it means you have no idea of the history or maoist insurgence alike. You can wish to ignorant or can actually learn from this dialogue process