I think countries have the power to shut down religions that pose a threat to the protection of its inherent citizens who are incompliance to those laws of the land.
If a government were to ban Islam, do you really think these extremist animals would just pack up and work 9-5 in a cubicle somewhere? If anything, it would probably fan the flames of their persecution complex and need for vengeance. A lot of them are trained and belong to terror cells in Muslim countries anyway. I would suspect if they are not raised this way, more are radicalized on the internet than in a mosque.
There isn't an easy answer to terrorism, and realistically such a barbaric attack probably does chill free speech to some extent, as some have observed. Hopefully the resolve of the French people and free societies everywhere won't allow that to happen. But I can't imagine that outlawing a religion, the majority of whose adherents are not terrorists, would have any deterrent effect.