There are two distinctions. First, this is a state scholarship which was denied based on what I believe was some provision of the state constitution
More importantly, the issue is not whether the government can fund scholarships for religious studies; obviously, as you point out,students use government money for religious studies all the time.
Rather, the issue is whether the government must fund religious studies on the same basis that it funds secular studies.
The state denied this, and the federal court ruled this violated the plaintiff's constitutional rights.
As someone who usually thinks religion and government should be kept separate, I agree that the plaintiff should have received the scholarship and it was religious discrimination to deny it to him.
But the real issue driving the attention this case is getting is school vouchers. If the plaintiff wins, this will signal that states who have school voucher programs must provide money to students at religious schools. This has thus far been ruled unconstitutional by lower federal courts
That's why this is a big, big case. It could change the whole educational system