In regard to the question of whether the Bible should be included in public schools in any form, I just wanted to add my personal experience.
I was a member of a unique honors class in high school that was a 2-period class and combined literature and social studies. All of the lit we studied corresponded to the time period we were studying. (At the time, the mid-80s, this was a progressive concept!)
In our first year, the social studies component was World History, and I remember that included in the literature we read was the Bible. We examined the stories in the context of how they would have been received and understood at the time they were written, and how those stories can and cannot help us learn about the people and the culture of that time. I also remember discussing the fact that some people viewed the Bible as written by humans and that others believe it is the exact word of God, and we also talked about the many different translations that exist (I think we used the King James as our text). We also read other religions' writings, too, during studies of various world cultures through time, not just Judeo-Christian writings.
I think that, when a variety of viewpoints are discussed academically and no one point of view is given priority, the inclusion of religious texts in education can be a valuable learning experience. Perhaps that's what inspired me to become a religion major in college! One of the most interesting classes I took was called Unconventional Religious Movements, where we looked at several religions outside of the mainstream, including Jehovah's Witnesses, Mormons, the Baha'i Faith, and Hari Krishnas.