The study is hardly convincing because of the methodology used. Every single fictional story used was a slightly altered Bible story (e.g., "John" parting the sea instead of Moses), and of course Christian kids inclined to believe stories they already believe even if you change the names of the participants. It doesn't prove that religious kids are more inclined to believe fictional stories that fall outside of the mythos of their particular religion.
That's true, or else they'd have a conflict that would tear their little minds apart.
We'd also need to know if the schools in question are on the same level in terms of achedemics. Many public schools are horrible but some church schools are even worse. My cousin transfered from a church school to a rather sub-par public school and was at least a year in behind most subjects and even further behind in math.
On the other hand, I think children who fight through the brain-washing of a religious education to find their own path gain valuable analytical experience. I remember being deeply conflicted by Tom Robbins novels, as they danced all over my Baptist up-bringing, but that made me think rather than just accept.