What's the harm in religious establishments?

Jack Balkin in this post neatly cuts right to what I think is the interesting question at the heart of the Court's pending Establishment Clause case, Hein v. Freedom from Religion Foundation.  He writes:

Standing to sue should depend on the nature of the underlying substantive right. In my opinion, the Establishment Clause does not simply protect citizens from certain spending decisions (although it does do that). It protects them from certain dignitary harms caused by the government's endorsement of one religion over another, of religion in general over non-religion, or of atheism over religion. In other words, the Establishment Clause requires the government to give equal respect to its citizens with respect to religious questions, both in its symbolic activities as well as in its expenditures of money. Thus, if the Government were to erect a large sign from general appropriations stating "There is no God," this would violate the Establishment Clause because it imposes a dignitary harm on religious citizens. . . .

If my substantive theory of the Establishment Clause is correct-- and it is more or less the theory that the Court currently holds-- then then any citizen of the U.S. who suffers a dignitary harm by reason of endorsement in violation of the Establishment Clause has standing to sue, and any citizen of a state who suffers dignitary harm by reason of endorsement by a state has standing to sue. A person's status as a taxpayer is irrelevant because it has nothing to do with the underlying nature of the substantive right.

It seems right to me that our discussion about "standing" to bring Establishment Clause claims has to include claims about what, in fact, is the harm in establishments of religion and on the nature of the underlying "substantive right" protected or conferred by that provision.  The question, of course, is whether Prof. Balkin is right about the "nature" of that right, or indeed whether the Establishment Clause creates and / or protects individual "substantive" rights at all.  (Some have suggested, after all, that it is more of a "structural" provision.)

That said, it is not clear to me why or how religion-related spending decisions inflict a dignitary harm on those who object to them.  (Which is not to say such decisions are permissible, or wise.)  Is it because the government's decision to spend, over my objection, on a religion-related project to which I object insults my dignity? Is the relevant injury the painful experience of having my objection go unheeded?  Or, is it because the spending decision (to which I object) expresses a claim about me, and my worth, that insults my dignity?  Something else?  (Maybe these questions just reflect the fact that I am not convinced by the Memorial and Remonstrance-type argument that such spending decisions burden the conscience of those who object.)