This is what the Supreme Court has had to say.

http://www.infidels.org/library/modern/church-state/decisions.html

I believe that allowing religion and state to mix is what brings us Iranian type governments. No doubt the same craziness would develop here if we let the two merge. Moderates typically lose out to the true believers. How would you like the government to be influenced by the likes of Pat Robertson, David Koresh, Mitt Romney, et al?