Pragmatism (or cynicism) and secularism are not the same thing, and what you're talking about sounds more like secularism. It sounds like players are carrying their personal beliefs and inclinations over into their characters. I agree that secularism as a principle has no place in a medieval simulation.
I've heard these complaints before, in fact I think there are some threads in the General Discussion forum along these lines. Nothing will change though without people going out of their way to create the social pressures that existed during medieval times IC. If someone talks smack about religion, religious characters in the realm should shun or even openly persecute him. If an entire realm embraces atheism as a guiding principle, one or more religions should stir up a crusade to crush the apostate kingdom before their blasphemous principles can spread and seduce others of the faithful away from the Truth.
Pragmatism (being practical moreover than cynical in my opinion) is done through a means of secularism. From what I've seen, its a way to run your realm with less conflict and to keep the game at a very
basic level. This is done either to create a more effective and united land or to limit the amount of work needed to organize/maintain/regulate/punish religion, religious authority, or religious people. I'm not a religious person outside of this game, so either its not done for the reason you gave, or its an indication of how bad people are at assuming a role and playing a character. Either way, such behavior ruins the game.
Its difficult for a religion to stir up a Crusade when every other realm is also atheist, i.e FEI. Arella and Edmund have already expressed concern - not for their religions, but more or less for the integrity of their friendly nations (Ohnar West) - which is lame considering that reflects on their own zealotry. Its also difficult to openly shun someone in your realm when barely anyone cares about religion in the first place. BUT, I rectified the whole religion thing in my realm because I had the power to do so, making it possible for others to do the same.
