This is actually an interesting conversation because I use this same argument with religious people. If God doesn't allow evil then no one is truly free, hence in a paradisaic world where evil is restricted no one has freewill anymore. Because freewill and free-choice includes evil.
I agree that if the blood issue were to be banned that the Witnesses would just use it for their advantage, seeing as how they have before so many times. But you, jinjam, are basically saying (if I'm understanding correctly)that if one can't have total religious freedom then it isn't religious freedom. I believe, that what people should base their belief system on, is evidence. It is evident that some groups of people can not have complete religious freedom without doing each other great harm. So, the best thing for everyone, is to get rid of the parts of religous freedom that hurt. No, that isn't "freedom of religon" since it is bound by laws.
It's interesting to me that it does in fact become so polarized. If you remove one thing, you remove them all. If you take away the ability to believe in one thing, it isn't freedom of religion anymore. On the other hand, in order to marginalize peoples' abuse of religon, you must set certain laws, as the government has. So in order to remove harmful effects you have to remove freedom.
What is the solution? I believe religon should be completely done away with. It's old, unscientific, and we should find new, up-to-date, humane ways of satisfying our desire to be "spiritual" creatures. Is that a real solution? Probably not. But I think it's better than all the deaths peoples' abuse of religion has caused.
The government has to force people not to abuse things. They force us not to speed or we get tickets, they force us not to physically fight or we go to jail, they force us to take care of our kids and if we don't they take them away. They can take away some mother's child because of neglect -- but don't say anything about religon?!
I think the government should force religion to be a certain way, in order to reduce the damage done. Or should the government stay out of your right to drink and drive? Should they stay out of my right to pee on your lawn? Just because something is religious doesn't mean it is above the law.