The Bill of Rights in the Constitution (which is actually the only consitution in the US that doesn't have a "Bill of Rights" originally written in it) should be a limit on federal power, no? If state governments have bills of rights that preclude the use of public funds for endorsement of religion (though a strong argument might be made for "nondenominational" support being non-endorsing of any particular religion), then I can see why they should be prohibited, but not on the basis of a limitation of the power of Congress.
If that's agreed, then which state constitution are we talking about? Or would you prefer to go about this from the other end--that is, from the theoretical arguments for and against public endorsement of religion?
I have to admit that your point is a valid one in that the First Amendment only prohibits Congress (not state gov'ts) from making law regarding religion. In fact, there are indeed state laws right now, for example, that even prohibit non-Christians or Atheists from holding office.
But, federal dollars are distributed among the states. (Whether that's right or wrong is another argument, I guess, but a fact for now). So, the federal gov't has become mixed with the state gov't.
Also, the states are collecting an income tax from all working residents, no matter what their religious beliefs. Yes, there are state laws that make it legal to do so, even if the funds are used to endorse a particular religion. But, I'd like to see those particular laws abolished.
Or would you prefer to go about this from the other end--that is, from the theoretical arguments for and against public endorsement of religion?
Remember, it can always go the other way. Today: State endorsement of religion. Tomorrow: State abolishment of religion. I wouldn't want either to happen.