It would undoubtedly be better if we didn't have religion in the near and distant future. We would all be able to start looking at ethics and morality in a secular, humanistic, rational manner, and come up with some better answers a lot quicker. Trying to improve the lot of humanity in a world where the teachings of ancient religions are seen as incontravertible is like trying to run a marathon with a big fat man man on your back.
But it is simply impossible to say that the world would be a better place if we had never had religion. Who knows, maybe it was a necessary part of our anthropological evolution?
As for Islam specifically, I don't see it as being any more or less offensive than any other religion. The current Western intellectual paradigm is to highlight it's "backwardness" while at the same time extolling the supposed virtues of Christianity and Judaism. This is really little more than institutionalised racism bred from a typically Saidian fear of the other.