Welcome to the culture wars.

What so many commenters miss is that many children, both those adopted and those not, are themselves LGBT. What message does it send them that the state facilitates discrimination in the basis of sexual orientation?

It seems, however, that we ought to be able to have some reasonable way out of this dilemma. It seems reasonable that a religious adoption agency be allowed to discriminate on the basis of religion. To discriminate on the basis of race, however, seems unreasonable even if there is a claimed religious base for it.

Similarly, discrimination on the basis of sexual orientation should be banished from our society. I will say that religious claims to a right to discriminate by sexual orientation are slightly more reasonable than religious claims to a right to discriminate by race, but only very slightly.

In the end, the balance should go to eliminating discrimination on the basis of sexual orientation. That is by far a much bigger problem in our society than limitations on freedom of religion.