More Politically Correct rules are no substituation for Tolerance of the ways of others.
As a Christian by culture but not by belief, the few occasions I have been wished a 'Happy Hanukah' I have felt warmed by the fact that someone wants to extend the good feeling of their own culture and beliefs out to me, I love it.
In saying 'Merry Christmas' people are in effect saying 'It's Christmas, I'm a bit nicer and happier than normal and I extend that courtesy to you, hope you feel the same way.'.
It must take the most intolerant and mean-spirited of people to take offence to that. To interpret it as 'Hey Jew/Buddist/Muslim/Whatever, why don't you believe in Christ for a change!' seems to indicate a persecution complex on the part of the listener.
Political Correctness is not a good replacement for Tolerance but as society runs increacingly low on the latter we are seeing massive amounts of PC rules being created to try and compensate for it. The 'Happy Holidays' rule being just one more.
PC rules limit what we can do and terrifyingly what we can even think. Tolerance allows us to keep our cultural diversity and lets us grow and learn from each other.