"In this scheme, the state should harbour no aspirations to tinker with the inner well-being or outward manners of its members. The foibles of citizens should be placed beyond comment or criticism, for fear of turning government into that most reviled and unpalatable kind of authority in libertarian eyes - the nanny state.
Compare this with how religions handle things. Religions have always had much more directive ambitions, advancing far-reaching ideas about how members of a community should behave towards one another."
BBC News - A Point of View: In defence of the nanny state
Under his analysis, the modern (post-Mill) state perceives its own role to confine itself to defending rights in order to secure liberty for the citizenry, whereas religions are prescriptive in the minutiae of lives in order to create a specific kind of world. He claims that in doing this the state weakly misses an opportunity to effect a positive change in the world, but he doesn't go so far as to completely endorse a religious method of total control.
I think that all of this depends heavily on what the role of the state ought to be. For a libertarian, the role of the state should be as unobtrusive as possible, securing liberties through implied or actual violence (police, military, etc.). But is this really the best that we can do, to enforce the right not to be harassed while we pursue our own ambitions?