The recent SSM debate shows us just how well people understand the degree to which we are affected by the morals of our society. In this case, many people want their moral views on the issue enforced by law. Whether or not these morals arise from religious conviction of social justice is really irrelevant. The more our beliefs are separated from our reality, the more unstable our position becomes. Like Jesus said, "ye cannot serve two masters". I think the conflict between church and state is typically not noticed because we are rather indifferent to the areas in which they overlap. To live in two worlds, indifference is un-avoidable. However, once we touch on issues that matter, friction occurs.
For us, hot topics may be SSM, abortion, Islamic fundamentalism, school prayer, creationsim, etc. But what were the hot topics during Alma's expansion of the church during Mosiah's reign (Mosiah 25-26)?
"therefore it became expedient that those who committed sin, that were in the church, should be admonished by the church"
I tend to think King Mosiah was cognizant of the difficulties associated with a large church (Mosiah 25, 19, Mosiah 26:12). This may be especially true if the heart of Nephite religion at this time was kept within a theocratic priest class. The problem Alma faced amounted to what we are experiencing now. What type of punishment should be given for actions that a specific group thinks are wrong, but others do not? In other words, where does the line between church and state blur? Is it all right for a church to stone a person committing adultery even if the state doesn't think so? Is it all right for someone to live a polygamous lifestyle if the state doesn't think so?
I think things get even more complicated if the tenets and beliefs of a religion are not well established. For instance, what should be done if a large sect of today's church starts believing that drinking coke is an abominable sin? What happens if the church hierarchy, perhaps like Alma (Mosiah 26:13), isn't ready to deal with the situation, and the people are demanding something get done?
Looking at this situation, it is interesting that Mosiah, whom we suppose to be the religious leader chose not to judge religious crimes. Why? Well perhaps he was politically astute enough to know that playing with religion and politics is a sure way to loose support of half your population. Perhaps the people were expecting religious crimes to be treated the same as societal crimes? With the literal way I see the mosiac law possibly being enacted, I find it rather easy to believe that the trouble Alma got into involved deciding what to do for sins for which God had given no clear punishment. For instance, if someone was to declare that God was a black jaguar that wasn't going to get resurrected, what do you do? To a church member, this heresy probably is as bad as adultery, but should the punishment be the same? I am sure some people would think so.
I find the solution to the problem quite interesting. The Lord doesn't give a legal answer. There is no mediation of sin. It is basically "if you are sorry, forgive him, if not, remove his name from the church". There is no attempt to maintain religious morals through law. In other words, we have religion running in the exact opposite way a state would. Perhaps this is why it was so easy for people in Chapter 27 to persecute the church. It had no bite, and hence no real power. The only power it could exert only occurred if you accepted it.
So does the separation of church and state make sense? I think it only matters when you have to choose between the distinct methods each use for behavioural control. Moral decisions are so personal any attempt to prevent religious interference runs the risk of religious tyranny. It basically removes a non-desirable group from the decision making process for no other reason than that their views are considered too unpopular. Whether or not this is done in the name of religious purity, and social liberalism is irrelevant. What matters is that if we try too hard to separate church and state, we may end up with a state that acts as much like a religion fundamentalist as any Islamic state. Of course those who are in the "in crowd" will never think so.