Crosses, Nativity Scenes, and Menorahs
The same principle applies to crosses and nativity scenes. Though both have been so cheapened by commercialization and poor taste that some may regard them simply as common cultural artifacts devoid of much religious meaning, they are nonetheless key symbols of two fundamental elements of Christianity: the birth and death of Jesus. Similarly, the Menorah is not just a candlestick, but the symbol of a Jewish miracle story.
To display these alone on public property is to violate the law, as it is currently--and, I believe, correctly--interpreted by the courts. To include them in a hodge-podge, in which the infant Jesus is visited by Frosty and the three Wise Reindeer, illuminated by a Menorah, with a wreath hanging on an arm of the cross, robs them of their significance. Why do it at all?

Our Constitution explicitly states "Congress shall make no law respecting an establishment of religion". Religion is not supposed to overlap with government. Period.
By erecting displays that represent one religion, that religion is not only being "acknowledged", but it is being set at a higher priority level than others. By not displaying every religion, some religions are being squelched. In addition, by showing ANY religion, the government is promoting religion. An appropriate way to acknowledge religion would be to create an educational public exhibit that can be updated upon request. It would educate the public about other religions with an open mind rather than just displaying symbols sacred to one religion.
I'm disappointed that past court cases (Lynch v. Donnelly) have resulted in allowing religious symbols to be expressed, for these decisions do indeed violate our Constitution. Turning the tables will be indeed hard.
This concept that it's perfectly okay to put a manger scene on the courthouse lawn, so long as you toss in a menorah, a star and crescent, and a santa for good measure, is silly. Not only is it confusing and bizarre, as pointed out in the comment above, but also it still violates the establishment clause. Governmental endorsement of a variety-pak of religions is still government endorsement of religion. It is still using public funds to pay for what amounts to "religious advertising." The fact that the government is giving prime-time billing to Christianity plus a nod to Jews and another nod to Muslims does not excuse a thing.
Thomas Jefferson's cautionary letters about separation of church and state were not addressed solely to states which endorsed a single religion. They were also addressed to states which had given official support and endorsement to several religions.
Beyond the fact that it would be impossible to fully include every possible religion, in an attempt to "make it fair," there is also the fact that many religions and ideologies (such as atheism) stand in direct contradiction to one another (as has been at issue with the atheist organization's sign in the Christmas display). Any "peaceful co-display" of the emblems or symbols of such conflicting ideologies is likely to quickly become a shouting match.
The government (our representatives, spending our funds) simply has no place in the middle of such disagreements. The only way to keep the government OUT of the middle of such philosophical head-butting is to have the government keep its hands clean from any involvement in the first place.
If Christians wish to display Christmas decorations and manger scenes, they should do so on private property, not at the public's expense. If Jewish people wish to display menorahs, again, do so at home or on the synagogue's property. And so forth...