Write-ups so far have discussed only the benefits of the separation of church and state. I agree and as a
non-believer I have actually no choice but agree. But it amazes me quite a lot why religious people embrace the separation of church and state.
Right, the Bible, the Quran, Talmud and alikes are words of God. Some rules are so clear there's no danger of misinterpretation. It is written that there are certain things you shouldn't do and some things you really should. And the words of God, well, they should be taken a bit more seriously than, say, a moral statement of a layman. A layman may be wrong but God hardly is, don't you think so?
If I ever convert to Christianity or return to Islam or find any other religion to be the one and only I would plead the reunion of religion and state with the great fervour. Doing otherwise would be like handing a fellow-man a one-way ticket to hell. The political system of a country like Iran would be the pursuit of dream. (Note: I don't know the details of the political system of Iran but this is my impression.) You should care about your brother and told him to do the right thing.
Yes, I see the problem here. When pleading for your, your God's moral discipline to consist the totality of country you may cause more hatred than good. For example, the prohibitionary liquor law begot more harm than it prevented - at least in short term, say 10 years or so. We don't know if the next generation would have abandoned alcohol if had been criminalized for good and thus the supply limited. Would the damage have been acceptable during the period of transition compared to the bliss of drastically lesser consumption of liquors of future generations? I would go for it.
To conclude, I would say that everyone would like to see her values spread over the society. A liberal layman like me tolerates many things one personally disapproves. If someone harms none but herself it's not my business but if she offends the words of God she has just stepped over the line. Or is it just me being a potential fundamentalist..?