Establishment Clause is more than just a “federalism” provision:

There has been talk after the Pledge case that the Establishment Clause was only intended to act as a “federalism provision”—that is its sole purpose was to prevent the federal government from interfering with state Establishments. This view is at best a half truth. While it is true that under the original pre-14th Amendment conception of the First Amendment, that entire Amendment would not apply to the states.

Therefore if a state wanted to effect an “establishment of religion” it could. Moreover, if a state wanted to interfere with “free exercise” or “free speech,” likewise it could. (This is complicated by the fact that for a state to violate free speech and free exercise inarguably violates “natural rights”—in fact violating all three arguably violates natural rights—but it is not as settled that state establishments violate natural rights. Before the 14th Amendment’s “privileges or immunities clause” the federal courts didn’t have the recognized legal authority to enforce natural rights against the states).

Douglas Laycock informs us of the 2nd half of the equation that is missed by the “federalism only” crowd:

I do not doubt that one meaning of the Clause in 1791 was that the federal government could not interfere with establishments in the states. But I am equally sure that one meaning of the Clause in 1791 was that the federal government could take no steps toward a federal establishment of religion -- not in the states, and not in the federal district either. Either a federal establishment or a federal interference with a state establishment would be a law respecting an establishment.

For more on this -- the implications of what else arguably is unconstitutional under the original conception of the Establishment Clause besides interfering with state establishments -- see Timothy Sandefur’s post, Is Thanksgiving Constitutional?