The USA Rights says that we have a right to have a religion. As well as that we have a right to express our self with out fearing persecution. They have public sectors it government buildings for a reason. And if you are really going to be offended by a nativity seen you need to to have a feeling check.
Yes, public displays depicting religious scenes and slogans should be allowed as they are examples of free speech. When on private property, such displays are protected speech of the person displaying the scene. As such, they should be allowed and to do away with them would be a gross violation of rights.