I know. Susan Wise Bauer discusses that at great lengths in her history books. For a time, kings controlled the papacy and other churches. But, later, the papacy took control. Either way, it wasn't separate.
When church and state aren't separate you get atrocities like Sharia law and the Taliban. You get Inquisitions. You get things like the Salem witch hunts- and signs point to those being politically motivated, but by the Minister. He was about to lose his job.
The world is filled with people who might want to unscrupulously resort to whichever tactics and tools they can use, in order to further their own ends. But when religion and state aren't ruthlessly and irresolutely separated, you get things like I've mentioned above.
The Church of Scientology would establish a theocracy, if they could. Within its little fiefdom, it has done that, in fact. If it could run the world, if it could get that powerful (which it can't) it would. And the results would not be pretty.
My guess is this:
With religion you have control and fear. People are afraid of losing their eternity and this fear is hyped and preyed upon by religious leaders. So then they aren't content to do their own thing, fine, I'm saved, I won't worry if someone else who isn't saved wants to go their own way. No, history (and current events like those shrieking fundie lunatics so often in the news) is filled with incidents where the fear of spiritual pollution is propagated and people's buttons are pushed accordingly. If you keep worship and government separate, you can keep some of these people from throwing their weight around. I mean, my god, people used to get in trouble for looking away from the raising of the Host at Mass.
The other thing is never underestimate the evil humans do. People who want to further their own ends will seize upon such weapons as they feel are available to them- including religion. I believe that the Salem witch trials were a case in point. Miscavige is probably another example.
