When it comes to this one case, I think SCOTUS decided it correctly. Even though the organization in question was a religion, and government mustn't be in the business of funding religions, the object of the funding in this case was a playground -- with no religious function. I think they had just as much right to playground funds as any other group.
When it comes to how this plays out to the "religious rights" issue at large, we'll see. This decision shouldn't in any case give the green light to government funding of religious functions, or to allowing religions to illegally discriminate.