The separation of church and state is not so much to protect the church from the state, but to protect the state from the church. The rise of facism and dictatorships throughout history is often intertwined with the rise of power and influence of a religion seeking to dominate other faiths and atheists.
Democracy, as an institution, should be free of influence from the church. Churches and the state have different goals and ideals to uphold: churches seek to further their own religion, attract followers and earn money, while the government is supposed to be defending, protecting, and serving the people from an independent point of view. Mixing the church and state would reduce the impartiality of the government, and push one religion or creed on the population, reducing choice and freedom, going against the principle of democracy that all should be able to choose.
If you think religion is good for a country, I ask you to re-think this and do it thoroughly. Firstly, look art the nations that are religious in Northern Africa and the middle east. Secondly, look at the world when it used to be controlled by Christianity: witch burnings, the crusades etc.
I am a strong believer that the church and state are separated, I believe when you allow the church to mix with the Government then the church will look to gain power in the Government and influence it's directions which overall is not good for the democracy as a whole.