Christmas is not a bad word. "Happy Holidays" struck me as an attempt to make it one.
A few years ago, to make some extra money for Christmas, I took a part time job workings nights at Home Depot in their Christmas Tree lot. It was a back breaking job, but also very fun to see families picking out their Christmas Trees. Really put me into the Christmas spirit. We were told though by management to tell these customers, buying Christmas Trees, "Happy Holiday's". They didn't want us to offend any non-Christians buying Christmas Trees. Brilliant!