I don't think religious persecution is something that should be portrayed as having a positive benefit. That wasn't the case in history, and it shouldn't be the case in a game. Equally importantly, speaking as a person of faith, I don't believe that religious hatred qualifies as an attribute of piety.
Religious intolerance is not the same thing as religious hatred. Religious intolerance is simply the theoretical belief that your religion is the correct one and other's have the wrong belief.
Not only is this idea of a positive benefit but was implicit in early civilizations. It was the idea that Christianity was the true word of God that brought Rome to conquer the world and spread this belief. They spread their culture far and wide converting the Britons, the various German tribes, and large parts of Africa to their belief. The result was they were able to maintain an empire that was more cohesive and was able to maintain common values and common laws.
The same was true of Islam. It spread by the sword and while the Ottoman Empire existed you saw peace in the Middle East among the most incohesive and most warring people of all time. Once the Ottoman Empire was dismantled in 1919 you saw constant conflict in the Middle East that still continues today. Without one cohesive religion ruling the land it all fell apart very quickly.
After the fall of the Ottoman Empire you saw a larger consequence, people began to interpret the Koran differently... and thus our modern take on terrorism, war, conflict, and another distinct (and majority) group of peaceful Muslims.
That's not to say all religiously intolerant regimes are successful or that it always gives them a massive edge. The High Lama of the Gulag Regime of Tibetan Buddhism, also known as the Da'lai Lama, was the ruler of the small country of Tibet.
To the north was China, a country ruled by a monarchy which eventually became a Communist country that was anti-religious in overall feeling (as the nation of China was never particularly religious anyway). When China conquered Tibet they created highways through Tibet, supported the local farmers, provided universal healthcare, provided K-12 schooling, gave scholarships for universities, and provided new job opportunities in actually running their own country.
To this day the lash back of annexing this religious theocracy is massive, as would be the same with any religious theocracy.