Assuming that this rule is applied fairly and objectively, (a significant assumption, I recognize) it makes perfect sense to me. Even though arabs invented it, I would not accept a heavily dosed "islamic Algebra" course for credit.
If the Christian schools provide objectively equal or superior courses to secular schools and it can be demonstrated as such, then obviously the students are as well prepared. If courses like biology, history and social studies are heavily dosed with fundamental Christian teaching to the point where they are basically courses taught to instill Christian beliefs rather than the purported subject matter, then the students are not demonstrably prepared and an SAT subject test is in order.
I agree. The UC system should be able to set its own standards for admissions. Admission standards, afterall, are there to help the student and indicate whether the student will succeed in that particular university. If the university thinks a particular biology class will not prepare the student for academic success, then it is the university's call.
Having graduated from the UC system, I know they are libertarian in the sense that everyone is welcome there, no matter what race or religion. The bottom line for Universities is that they need to keep up their scholastic ratings. And they also play the $$$ game. One metric a university uses is the number of students who graduate and find employment in their field. If the university does not think a student will succeed, it could hurt their ratings and the student will not be admitted.
To turn this issue of admission standards for a biology class into a religious issue is like playing the race card every time a racial issue comes up, imo.