Yes, you can create one rate for the US in general and then create special rules for Alaska and Hawaii respectively.
Our shipping rules are set to ignore general locations in favor of specific ones, so it would not be necessary to create a specific rule for every single state or country.
Here's some example instructions to set this up with just a few shipping rules, which means you don't have to mess with any packaging costs or capacity settings, etc:
Go to Seller Admin>View/Edit/Delete Products:
Select an existing shippable product of yours and click Edit;
On the first screen, if Shipping/Buyer's Address is not checked there, tick that box;
Click Next until you can Submit to save settings;
Repeat this for all your tangible goods;
When adding new shippable products, remember to enable Shipping/Buyer's Address.
Go to Seller Admin > Cart Shipping Settings and set up the following:
Shipping Origin: select your country and enter your zipcode;
Shipping Destinations: select United States as the only country you will ship to;
Leave all other settings blank or 0.00;
Click Next to save settings and proceed to the Shipping Rules screen.
In the Existing Shipping Rules menu, select and Delete any Rules you may have saved there.
Set up your first Shipping Rule for free media mail:
Shipping Rate Calculator: Flat
Shipping Amount: 0.00
Shipping Method Description: Media Mail (the description field is very short, you might need to abbreviate)
Country: Select United States;
Click Submit to save the Rule.
Set up a flat rate for UPS in the continental US:
Shipping Rate Calculator: Flat
Shipping Amount: 7.50 (or any base cost you prefer)
Shipping Method Description: UPS
Country: United States;
Click Submit to save the Rule.
Now, to create special rates for Alaska and Hawaii, enter the following:
Shipping Rate Calculator: Flat
Shipping Amount: 17.50 (or any base cost you prefer)
Shipping Method Description: UPS
Country: United States;
State: Alaska
Click Submit to save the Rule, repeat these steps for Hawaii as well.
If you stop here, the free media mail option will not be offered to buyers in Alaska or Hawaii, they will only get the UPS option. If that's what you want, you're done. Otherwise you will need to also create a Media Mail alternative for both of those states, by creating two more shipping rules with the following settings:
Shipping Rate Calculator: Flat
Shipping Amount: 0
Shipping Method Description: Media Mail
Country: United States;
State: Alaska
Click Submit to save the Rule, repeat these steps for Hawaii as well.