Regarding the question if the state should punish all vices Saint Thomas Aquinas the Angelic Doctor said, “Now human law is framed for a number of human beings, the majority of whom are not perfect in virtue” and so “human laws do not forbid all vices, from which the virtuous abstain, but only the more grievous vices, from which it is possible for the majority to abstain” (cf. Summa Theologica I-II.96.2). Obviously things like homicide and abortion could be penalized due to the gravity of their nature and since the majority do not practice such things.
The Angelic Doctor even continued warning to “lay upon the multitude of imperfect men the burdens of those who are already virtuous” that they “abstain from all evil” would lead “these imperfect ones, being unable to bear such precepts” to “break out into yet greater evils” (Ibid). We can see the examples from secularists of the French Revolution or the Spanish Civil War what happens when the state puts excessive penalties on so many vices that it frustrates the public and leads eventually to a violent revolution.
You may remember I earlier wrote in defense of a state religion and emphasized against the use of force to convert others to the state religion. I even mentioned Dignitatis Humanae, one of the many documents of the Second Vatican Council. I do not desire a state reminiscent to the those of the Islamic world. This conciliar document does open up clarifying the mission of the Church, but it’s the state’s job to defend the populace and the Church in particular. This was understood though in somewhat of a different way when Spain allowed limited freedom of religion to Jews and Muslims especially in Valencia and the Inquisition only had jurisdiction over Christians.
I would add that excessive use of penalties for sins committed would undermine the role of the Church in favor of that of the state as it would undermine the role of the Sacraments in the person’s life. Sure, we could go back to the old ways of Israel. But who would want to? Besides, that was the Old Law. We are now under the law of grace. I’m not saying the culture should endorse vice, but the culture can influence our way of thinking without state laws in every situation as we clearly see in examples such as swearing. In many places here it is not illegal to swear in public, but a lot of people wouldn’t like that, especially if there are children around. In many places it is culturally taboo — like in Germany — to do things like wash your car on Sunday, but you don’t go to jail for it; it’s a cultural influence from the Christian faith many take pride in and enjoy as the Sabbath was made for man and not vice versa as Our Lord said (rf. Mark 2:27).