No you cant distill anything anywhere in the US without an ATF license.
"Why do they sell stills and all the necessary product to make corn whiskey on the shelf right next to the still if it is definitely illegal to distill your own liquor for personal consumption?"
Why? Same reason you can go into a head shop and by nitrous oxide containers to make "whip cream" even though nobody would buy their whip cream there. And oddly enough they sell crackers right next to them and balloons next to those. Odd huh? I'm sure nobody would ever do anything illegal with those things that happen to be next to each other.
Why? Because technically you can use a still to make ethanol for fuel or to distill water or essential oils. Its its Federal a felony (5 year felony, before you even put it over wash, then it goes up from there) to own one if you dont tell the ATF you plan on making fuel with it and register it with them. Its not illegal to sell corn(corn can be used as an adjunct in beer). Nor is it illegal to sell a charred white oak barrel (because you can age chardonay in one). Nor is it illegal to sell yeast that is called distillers yeast(not sure what excuse you can use for this one). Nor is it illegal to sell products like Liquor Quik because you could use a legal vodka as a base for them. So you could just be setting up to make some beer with flaked corn, rye and 6 row malt in it, and you intend on making some wine that you will age in oak, and you need some essential oils to put to your beer so you need a still. Also while you are making all of this you also are going to stop by the store and get some vodka so you can make peach schapps out of it using your liquor quik flavoring. Oddly enough if you make a mistake and add the ingredients in the wrong way you might accidentally end up with corn whisky or even a neutral spirt.
Thats how they can sell it. I can tell you that most of the micro distillers made illegal alcohol at some point (how else can you learn, and you sure as hell arent going to open a distillery having never made a drop of liquor in your life)
Trust me on this I'm 1000% positive on the law on this. I have no quesiton whatsoever about it at all. You can make beer/wine up to 100 gallons per adult person in your household up to a maximum of 200 gallons total. But you Absolutely POSTIVELY Cannot distill anything (legally). This is a FEDERAL law and there is no state in the US where this is legal. That being said its unlikely you are going to have the ATF bust your door down for make 2 gallons of whisky. However if something did happen and the police arrived there, you'd be f_cked.
Why do I know this, well A) because I'm an avid home brewer (as in I make around 150 gallons a year) B) because I write software for brewers and distillers to comply with ATF reporting requirements. Things like "brewers report of operations"/etc C) Because my wife worked with a local distiller in Michigan D) because we owned a business that used to put on beer and wine festivals E) because I entertained opening my own Brewpub and micro distillery.
I know quite a bit about brewing, distilling, reselling beer/wine and liquor. In fact I can probably guess which home brew shop you saw the still in because I know of one around here possibly in Waterford that has them.