There's an important distinction that should be drawn between Western religions that organize themselves in a similar fashion including Christianity, Catholicism, and Islam, and Eastern religions that focus more on spirituality and improving the self, such as Hinduism and Buddhism.
Western religions are a serious problem, and it's state mandated lack of interference that has let them get as powerful as they have been. People willingly get violent, and use their religion as a scapegoat for bigotry or outright hatred. It's a sad state of affairs, and by offering religious freedom, unfortunately, this is the kind of thing that happens. Notice that when religion causes problems, it seems to always revolve around confrontational Western religions. Granted, you can pick out times of blatant religious intolerance in places such as Japan in the past, but it has never been as troublesome or consistent as in Western countries.
Overall, I have no idea what the best way to handle it is. I guess officially declaring the religion to be atheism for a country can prevent religious interference on higher levels, while giving reason to stop giving massive tax breaks to every person that wants to call their building a church. It doesn't solve any of the deeper issues that have been prevalent for centuries though that are so deeply embedded in our cultures that it seems impossible to get past.
