I guess it’s only separation of church and state, not mosque state.
The problem is the Saudi king. Old Fahd didn't push stuff like this. His successor is a Philip II type (Philip spent much of his reign on his knees, praying). Remember old Prince Bandar, the urbane, F-15-flying former ambassador? Haven't heard of him in years; he's in total eclipse now. But there are still moderate Moslems over there who aren't down with all the righteous-of-Islam crap.
But we need to man up to these guys. It's never good to look gutless around bullies and pushypants types. It draws flies. And real predators, like the Chinese.