Prayer is not banned in schools. It is banned in public schools, financed by tax dollars. Go to a private school and you can pray your little heart out all you want. Using state funds, staff and facilities to administer religious rituals sure sounds like "establishment" to me. As for the jurisdiction, you may have had a legal point at one time, but that was settled by the courts, too. As I recall, the right squealed as much about that as the left is squealing now about the gun thing.

"Although the First Amendment explicitly prohibits only the named rights from being abridged by laws made by the Congress, the courts have interpreted it as applying more broadly. As the first sentence in the body of the Constitution reserves all legislative authority to the Congress, the courts have held that the First Amendment's terms also extend to the executive and judicial branches. Additionally, in the 20th century the Supreme Court has held that the Due Process Clause of the Fourteenth Amendment "incorporates" the limitations of the First Amendment. That means that the restrictions of the First Amendment also apply to the states, including the local governments within each of those states."

http://en.wikipedia.org/wiki/First_Amendment_to_the_United_States_Constitution