Secular theocracy

The CBC reports that “Full-body gowns that are worn by the most conservative Muslim women have no place in France, President Nicolas Sarkozy said Monday.”

A comment like this makes me wonder: if the arguably most secular country in the North Atlantic world is in the business of making religious decisions, is the idea of disestablishment really practically possible?

And if it isn’t, is there really any better model for religion/state relations than the Treaty of Westphalia’s cuius regio, eius religio? (And it should be noted such a philosophy is logically consistent with a democratic state.)