Offensive speech, though unpopular, is protected under the first amendment. I think that is what lies in the core of my objection to the current (this and last generation's) interpretation of the "separation of church and state argument" which is supposedly based on the First Amendment. From my "non-lawerly" perspective, I do not believe that the language is vague, that the congress shall "pass no law" regarding the free exercise thereof. It makes no specific mention of public places. I could almost argue that the First protects prayer in school.
A few things to keep in mind about my argument... I am agnostic and don't "appreciate" the fact that I was made to recite the Lord's Prayer and the 23rd psalm every day in grade school (public one no less - yes, I'm that old). My best friend all throughout my school years was Jewish. I think it would be "fair" to expect that church's would start each sermon with the Star Spangled Banner and lose their tax exempt status, if prayer in school is mandatory :-)
In other words, as is the case with most complex issues, I don't see this as black and white. I was taking exeption to your using the First as support for not allowing prayer in school. I can think of hundreds of reasons why I think it not be done, but I think the First clearly says that we shouldn't look to it for support? Perhaps?