See, this is where you lefties don't seem to get it. It's not an offense at "Happy Holidays." It's offense at the exclusion of "Merry Christmas." Let's go back to the sandwich shop analogy. We don't want the place to stop serving everything that's not a turkey sadwich, but we'd also like the place to continue to serve turkey sandwiches, despite the fact that they think we'll come anyway and they're trying to reach the other tiny portion of the population.
In fact, I think this fits it better. Let's say I have a shop it town that serves sandwiches, but let's switch the preferred sandwich to ham. Jews and Muslims are forbidden to eat ham, so they come in and get roast beef, turkey, and a few other non-pork products. They watch others eat ham, eat their other stuff, and, in general, are content to let everyone else go their own way. One day, a person from PETA who doesn't really care about the Muslims and Jews, but instead want to eventually outlaw all forms of meat eating. They sue the city to ensure that none of my ham sandwiches can be served at any public function, since it descriminates against Muslims and Jews, and is therefore an endorsement of Christianity, since most Christian holidays (like Christmas) traditionally involve a ham meal. There's also a bunch of news stories in the local paper of how appalled a Muslim is that I would even touch ham, much less serve it in my store. At the same time, there's several articles featuring non-Jewish, non-Muslim people saying things like, "What's the big deal? So we'll just have to buy ham and bread when we want a ham sandwich in our own homes. This isn't an attack against ham, since everybody can still eat ham in their own homes, just not on public property where it offends Muslims. With all of this going on, I'm quietly convinced that I wouldn't lose the ham-eating audience by removing ham from my store, but that it will boost my business, since the Muslims and Jews won't be offended any more and will come in and buy my sandwiches, now that they're free from watching the abomination that is ham. Understandably, the guys who have enjoyed my ham sandwiches for years are outraged, and I lose a good chunk of my business. Now tell me, were my faithful customers wrong and overreacting when they stopped buying my sandwiches? Should I re-institute ham or just tell my customers that they're a bunch of intolerant bigots like the guys on the news say.
Or what if I even keep selling ham, but I don't market it as a ham sandwich? It just comes in a plain brown bag and is made behind a screen and none of my employees can call it ham and my customers can't take it out and eat it in my store. Should my customers be offended that they're love of ham be treated as something that should never be shown in public, or are they just being pushy bigots who want ham-eating pushed on everybody?