I actually find this story beautiful and very American.
Every religion and every culture seem ridiculous when viewed by outsiders. I'm sure someone from another culture looking at a baseball game where everyone cheers because some guy hit a ball looks crazy. Sports, ComicCon, Religions, every culture does stuff that makes more sense if you really understand it, but at first glance means very little.
Search "Eruv" on Amazon and you'll see multiple books written on the subject, some hundreds of pages long. This is a hugely complex area of Jewish law. Obviously if it were just a "loophole to fool God", most religious people would not do it. The video we watched is just 2 minutes long, obviously they heavily simplified their explanation.
What's great about America as that while the government doesn't "support" any religion (the maintenance is paid by the Jewish people who use it not the government). The government enables to the extent possible every culture and community to do whatever they need to do, whether it's to put up a tiny wire around the city or have a big festival or parade. It's just another example of the peaceful coexistence that makes America work.