Some context from someone who used to live in Indiana:
The bill was widely seen as being primarily designed to be anti-gay. Last year the state legislature advanced a state constitutional amendment banning same-sex marriage so a state court wouldn't legalize it only for the federal judiciary to make it legal in the state. Furthermore, it was very much modeled after the Arizona RFRA from last year, which was widely viewed as anti-gay, meaning that the state knew what they were getting into. Anything about this bill being used to defend business owners from issues not relating to same-sex marriage is all pretense.
But with that said, I actually do really believe that RFRAs are necessary to keep free exercise meaningful. Normally they are designed to protect the freedom of minority religious groups who are most likely to be accidentally impacted by laws, such as the Native American Church being harmed by peyote bans.
The Indiana law had two big differences from the Federal, and most state, RFRAs.
1) It actually could be used as a defense in lawsuits where the government wasn't a party. Deck was wrong on this point.
2) It explicitly covered businesses.
Normally these laws are designed to mitigate the damage of federal law and have nothing to do with individual interactions, or businesses for the most part. This established the ability of corporations to be religious (already a tenuous argument) and then would have shielded them from lawsuits involving the denial of service on religious grounds. The state legislature even initially voted down an ammendment explicitly clarifying it couldn't be used for discrimination until the backlash forced Pence and the assembly to backtrack. So there was good reason to believe that the bill was really intended to deny service to LGBT customers. That wasn't just an incidental bug.
But it seems as if most people here already knew or suspected that. At least I don't have to argue those pretenses.
Anyway, the reason that it matters is largely that it would be an issue in small rural towns, of which the state has many. Those areas tend to be strongly socially conservative (and small) meaning that particularly for trans individuals and same-sex couples, people would know who they're serving and there aren't many alternatives. And by denying service to the person already in a small, marginalized group in that society you aren't likely to be seriously impacted. Even if you do get Yelp flooded with backlash when the Internet finds out, you're just as likely to make a couple hundred thousand dollars when the conservatives on the Internet find out.
I opposed the law for a few reasons. The first being that it was absolutely horrible PR for the state, and the boycotts and lost conventions would've been economically damning. Indiana is more or less the nation's center of gravity by air so we get a lot of conventions, as well as sports events from the NCAA being hosted there (to say nothing of the events Lucas Oil and the Speedway bring). The second was basic human decency. While I recognize that there is something of a "persecution" of Christians in America (as a Christian in America), that's absolutely nothing compared to what the LGBTQ* community goes through, especially in the rural areas of a red state. Being able to have service refused at businesses on top of existing discrimination is a little much. The third is that the point of a business is legally to make money. As such, I don't see how a money-making entity can have religious views. Even if they do, being able to use those to justify not doing the thing you legally exist to do seems a little much, especially when you're singling out and refusing service to a marginalized group.
But with that said it was already legal to do that in Indiana, and still is. In fact it's pretty routine in some areas for openly gay or transgendered individuals to be denied service on buses or at least harassed by the driver. But the bill mattered because it represented a backlash mentality: yeah, the gays may have thwarted our attempt to keep them from marrying, but we'll show them now. That was more or less the political point of the bill in context, and a large part of why it was so odious. The opposition was less about keeping change from happening (because nothing really changed) and more about refusing to have what little rights the LGBTQ* community has accumulated be swept away in a conservative backlash to their right to marry.