This is the same logic that praises unwed motherhood because at least they didn't have an abortion. The key phrase is "for the moment at least". America has been slavishly adopting the European model one modernist idea at a time. Obviously, Ratzinger believes that it is the state which makes religion possible, when it is God that makes all possible as Christ said to Pilate.
Oh yes, modern Europe has such a great record on religious freedom for Christians. The Swedes have imprisoned a pastor who dares to speak out against homosexual activity. "Hate" speech laws are spreading like wildfire, outlawing expression of Christian doctrine. Buttiglione is denied political office solely because of his Catholic views. Sorry if I don't think the Europeans are in any position to judge the US on this matter.