Refusing the service should be their right.
Should a black baker be required to bake a cake for a KKK picnic?
Should a Jewish baker be required to bake a cake for a Nazi gathering?
Should a Christian baker be required to bake a cake for a pervert wedding?
The answer to all of these is “No”.
I agree with you 100 percent. But only worrying about offending Muslims is sharia. If Christian bakers can be put out of business then turnaround is fair play.