What this means is that they would have happily continued to knowingly and deliberately break the law if only no annoying atheists had been around to insist that the law be followed. This is something atheists need to keep pushing: that Christians adhere to neutral legal standards, even when that means they must abandon traditional privileges they have grown to assume they have a right to.
Council members said they were saddened -- but not really surprised -- they had to end a tradition begun in 1952.
"It's not a surprise, but I'm disappointed that we had to cave into this or we would've been open to a lawsuit," said longtime Councilwoman Thea Unhoch. "You can't even say 'Merry Christmas' anymore."
Source: USA Today
It's sad, but hardly a surprise to see someone link this to "Merry Christmas." The two issues aren't actually connected in any legal sense, but they are connected in the sense that both are a sign of the decline of Christian privilege. Happy Holidays is preferable to Merry Christmas because Christians are no longer occupying a privileged place in society. The Lord's Prayer is not longer acceptable in official government functions because Christians can no longer dominate the state like they once did.
Naturally all of this upsets many Christians because they don't like not being able to dominate society. It is, however, a situation they are going to have to get used to because non-Christians in America will not be willing to return to a second-class status. Christianity must cease to be a privileged class of beliefs, institutions, traditions, and people just as "male" and "white" must cease to be privileged classes in America. It will take a long time for this process to be complete, but it must happen.