When people start identifying themselves as X or Y and saying X is better than Y is when we have problems.
The Bipartisan political system is a terrible cancer, for example. Because now you vote republican or democrat. And it ruins the media because the republicans own this station and the democrats own that station and nobody who thinks in between gets represented.
Religious systems are a terrible cancer for a similar reason, because you have extremists of the faith who bomb people for poking fun at them or others who get persecuted for thinking a certain way. Remove labels completely and it ends up boiling down to what people truly think in conversation, rather than the stereotypes associated with their label.
So many people I know hate "Muslims" because they associate Islam with terrorism, because of the extremist sect that's so popular in the media. So many people I know hate "Christians" because of the evangelist sect that gets so much attention. Labels and systems like this are terrible because they take away what it means to be a human being with your own beliefs and they remove our ability to be truly represented.
On an individual level religion and faith can be great. It gives some people reason to live, it gives others morals and values to live by. On a public level it's caused nothing but harm. History proves this.