rc,

you are absolutely correct in that law is morality being enforced by the state. Religion has traditionally played a prominent role in how morality was perceived, and thus in how laws were made - there's no problem there. Here's how G.K. Chesterton put it:
Chesterton, Orthodoxy, 1908

Morality did not begin by one man saying to another, "I will not hit you if you do not hit me"; there is no trace of such a transaction. There is a trace of both men having said, "We must not hit each other in the holy place." They gained their morality by guarding their religion. They did not cultivate courage. They fought for the shrine, and found they had become courageous. They did not cultivate cleanliness. They purified themselves for the alter, and found that they were clean.
Religious thinkers have greatly influenced, through all times, the way we think about morality. Generally, the guidance was good, and society was able to benefit from their advice. The problems, though, start when those religious thinkers start speaking for a society, based on their particular doctrine, in stead of speaking to it.

An argument you'll often hear is "because the Bible says so", or "because this is my religious belief", two arguments that render any discussion on morality useless. Challenging those "arguments" requires that you either have to challenge the Bible, or that you have to invade someone's very private domain - that of his religious beliefs.

These arguments are flawed (on top of being counter-productive and childish): "because the Bible says so" suggests that there is only one interpretation of the Bible (and that one correct interpretation is, of course, the interpretation of that one person), which we should all know by now is ridiculous. The second "argument", "because this is my religious belief", suggests that no aspect of one's beliefs can ever be flawed, and, even more important, that there cannot be any room for growth or development

There are very few scholars left, even religious ones, who believe that a moral system should (or even can) be based on religious belief alone.