Who'd have ever thought that "Merry Christmas" could turn into a political statement? Or that not saying "Merry Christmas" could also be a political statement which could inspire threats of boycotts, or attacks from the right-thinkers on a president who put "Happy Holidays" on a greeting card?
The impulse not to say "Merry Christmas" comes from good intentions. The theory is that non-Christians might feel offended. I've yet to encounter a Jew, Buddhist, Wiccan, Unitarian, atheist, agnostic or humanist who does feel offended by the sentiment, but then again, I live in the boondocks, and people might be more easily offended in civilized metropolitan areas where they have diversity trainers.
Further, if "Merry Christmas" is offensive, then so are the usual workarounds. Take "Happy Holidays." The word "holiday" comes from the Old English "halig doeg," and you're right if you think that meant "holy day." Thus there's an inherent religious element in that greeting, and a specific religious element if you're using it this time of year (you're not talking about Yom Kippur or Ramadan).
Much the same holds for "Season's Greetings." What, after all, is the most common greeting of the season? Doesn't this really say, "I'd like to wish you a merry Christmas and a happy New Year, but I don't know you well enough to know whether you'd welcome those sentiments"? Or perhaps it means "Happy Hanukkah" or "Joyful Kwanzaa," although not everybody celebrates those, and thus the potential for offense remains.
http://www.denverpost.com/opinion/ci_3303068