Good essay. And you nicely brought out the problems inherent in a public square. But your proviso about "offensiveness" opens up an almost infinite source of disputes. Which we're living with now. I dislike having government be the instrument for deciding these things. But I haven't figured out another way.
Seems to me that on the local level, in a democratic system such as ours, it is somewhat more managable. We recently survived a high school mascot (indians) controversy. The larger the government, the larger the problem. However, I also think the larger the government involved, tne less value that is derived from the "public" square in the first place. A local town square has value, IMO, which is worth the occasional grief.
The missing 'way' of deciding these things is by restoring the power of jury nullification. Government hates this power, and has effectively removed it from our system by judicial decree.
Judges are actually instructing juries that they cannot factor the justness of a law in making their decisions as to the facts of a specific case. This is a travesty of justice.
Somebody has to do it. I suppose, were we on some other historical trajectory, a private entity would do the sorting-out. My point is not that we need a government in order to have culture, but that we need to extend the notion of individual rights into the cultural sphere in order to have culture.