Arguing the intelligence of anyone supporting either the original 1993 law or the present state laws is an exercise in futility, because it assumes there was any intelligence involved. Politics, votes, and placating constituents is what those laws were and are about. Politics is rarely about ethics and doing the right thing.
Lawsuits will determine the manner in which these laws are applied, as they already have. The free market is free to the degree it does not violate the Constitution. When it appears to do so, people sue. And to this point, the SCOTUS and the regional courts have almost universally determined that commercial for profit businesses do not have a right to discriminate. The protected groups have evolved over the decades, and it includes blacks and other minorities, women, religion, the disabled and now sexual persuasion. These laws were not necessary; they are political in nature and will ultimately accomplish nothing but allowing narrow minded people to attempt to impose their own specific religious beliefs on others, which to this point in time has thankfully failed.
The free market will eventually rule out because large national and multi-national corporations will ultimately avoid the states supporting such hatred. To this end the Indiana governor is already feeling the heat. Good for him. But that is a result of people driven by secular humanistic objectives who think discriminating against the LGBT community is hate, which it is. That is not what Adam Smith had in mind when he originally talked about free markets, but it is a 21st Century version of how those markets can be controlled.