There is no precedent, either judicial or legislative, to support this lunatic notion. Thomas is a boob.
Justice Thomas' opinions consistently contain precise, detailed constitutional analyses. Your calling him a boob, like your calling his argument that the Establishment Clause was a federalism provision the states meant to protect their own religious establishments a "lunatic notion," says far more about you than about him.
I doubt you have even read Thomas' arguments in Elk Grove Unified. They are fairly complex and difficult, as his arguments often are, so you might not understand them even if you had studied them. Your assertion that there is no precedent for what Thomas was arguing is just plain false.
In his concurrence in Zelman v. Simmons-Harris two years before Elk Grove Unified, Thomas had also argued that the Establishment Clause was a federalism provision and doubted the logic of incorporating it. Professor Amar of Yale, an eminent constitutional law scholar, took this same view that the Establishment Clause made clear that Congress could not interfere with state establishments in his 1998 book "The Bill of Rights," see pp. 36-39. Before that, Justice Rehnquist had taken a similar view in his dissent in Wallace v. Jaffree in 1985.
In 1963, Justice Stewart had made the very same point in his dissent in School Dist. of Abington Township v. Schempp: "[T]he Establishment Clause was primarily an attempt to insure that Congress not only would be powerless to establish a national church,
but would also be unable to interfere with existing state establishments" (emphasis added; six states had official religions at the time of the Founding.)
Justice Stewart further commented in Schempp that “the Fourteenth Amendment has somehow absorbed the Establishment Clause, although it is not without irony that a constitutional provision evidently designed to leave the States free to go their own way should now have become a restriction upon their autonomy.” This was the same irony Justice Thomas noted in Elk Grove Unified when he said that "As strange as it sounds, an incorporated Establishment Clause prohibits exactly what the Establishment Clause protected—state practices that pertain to an establishment of religion.”
Long before Schempp, in 1947, Justice Frankfurter had argued powerfully in his concurrence in Adamson v. California that the Due Process Clause of the Fourteenth Amendment did not incorporate
any part of the first eight amendments in the Bill of Rights--including the Establishment Clause--and apply it to the states. And Frankfurter was not the only one to subscribe to this "no incorporation" theory.
Of course nothing in the Bill of Rights originally applied to the states, as the Court made clear way back in 1833 in Barron v. Baltimore. It was the Supreme Court, in a long series of decisions starting about 1900, that applied first one bit of it and then another to them. The rationale for this--which has changed considerably over the years--was that the Due Process Clause of the Fourteenth Amendment was intended to "incorporate" some guarantees in the Bill of Rights (but not others) and apply them to the states. The Court did this with the Establishment Clause in Everson v. Board of Education in 1947, hardly bothering to support the incorporation with any reasoning. That explains Justice Stewart's remark that the Fourteenth Amendment
"has somehow" absorbed the Establishment Clause.