Your logic about not being able to legislate hate crimes is flawed, but really I think the situation is just more nuanced than either of you want to realize.
The courts differentiate between premeditated murder and crimes of passion, one obviously being much more serious than the other. That distinction is based solely on intent. In both types of murder, the victim is no more or less dead. Therefore, law can differentiate the seriousness of a crime based on intent, and dole out varying degrees of punishment accordingly.
Based on your logic we shouldn’t use intent as a means for deciding punishment. In the case of hate crimes, the intent is more offensive to society’s sensibilities than in crimes motivated by other factors. The same is true for crimes of passion versus premediation. Premeditated murder is merely more offensive to society than someone who kills out of anger or excitement. That’s why it carries a harsher penalty.
I’ll admit that hate is a hard thing to pin, and that someone should only be charged with a hate crime when it is utterly clear that it was a prime motivating factor. In cases such as the Duke Lacrosse scandle where the accused were allegedly yelling racial slurs at the victims, I’d say that’s pretty clear.
But let’s take this argument in a different direction (although it might be the same direction you took it in, just in different words).
So we got this thing, the first amendment. And it protects everything. My right to say whatever I want, your right to say whatever you want. If someone wants to think that all gay people are stupid and morally reprehinsible, that’s protected just the same as the gay community’s right to hold pride parades and live their lives the way they want to.
So if all opinions are protected under this first amendment, then if you attach a harsher penalty to a crime because of someone’s opinion, you’ve essentially criminalized the opinion. But, is it true criminalization because the opinion isn’t punishable until its acted on? Can opinions be protected in the abstract but then condemned when put into action?
My gut instinct says they can be protected and condemned, but the part of me that wants to live in Absoluteville* where everything is black and white tells me that harsher penalties for certain kinds of opinions is an infringement on the first amendment.
*terminology courtesy of Richard Hronek (intellectual property rights are a downer)