Pornography, Religion, and the State's Incompetence

I highly recommend Andy Koppelman's essay, Does Obscenity Cause Moral Harm?, which was published a couple of years ago in the Columbia Law Review.  Koppelman concludes that moral harm is real and that pornography can cause it, but that "these premises do not entail that there should be censorship."  He concludes:

The status of "moral harm" is somewhat analogous to the constitutional status of "religion."  The state can recognize it and try to take account of it -- at a very high level of abstraction.  What it cannot do is try to make fine distinctions among instances of it.  That is beyond its competence.  And the idea of state incompetence is as important in free speech doctrine as it is in religion clause doctrine.  It has particular bite here.  Just as government should not be able to decide for us the path to salvation, so it should not be able to decide for us what our sexual fantasies should be.

This is a rich and provocative essay, and I'm interested in others' reactions.  From the perspective of Catholic legal theory, does our opposition to state regulation of religion arise from the state's incompetence, or from a more affirmative vision of human freedom?  Or are the two invariably linked -- i.e., is the regulation of religion a threat to human freedom only because of the state's incompetence?  (If the state was somehow deemed competent in religious matters, wouldn't we still favor individual religious liberty?)  Does the censorship of pornography pose the same threat to human freedom as the regulation of religion does, or are we more willing than Koppelman is to let the state distinguish among types of human freedom?