Do religious monopolies backfire? Randall

Do religious monopolies backfire?

Randall Parker at ParaPundit draws attention to a New York Times story on the loss of religious faith in Europe. He points to a theory mentioned in the article that the state-sponsored religious monopolies to which Europe has been prone have (a) led people to be suspicious of the major denominations so sponsored, and (b) led to a lessening of interest in religion ("In a free market, people get more interested in the product..."). I'm skeptical about the second point; the intense interest in religion in Islamic countries or in Europe in the Middle Ages suggests otherwise.