Many Christians note that they "venerate" rather than "worship" icons of their religion, in a way similar to America's treatment of the flag.

Idols (different from icons) are forbidden in the Old Testament. First, we are told in Exodus 20:4-5 that they're against the rules because their God is a jealous God. Later, in Deuteronomy 4:14-19, the Jews are instructed not to make in image of God because they have never seen him and any accurate rendering would therefore be impossible.

Christians, however, believe that because they saw God incarnate in the form of Jesus Christ, icons of this figure are an accurate representation of God. Thus, iconography began with Jesus. The arguments for icons are rooted in the masses - especially in regards to literacy. These icons are supposed to turn thoughts from the earthly to the divine, and can serve as points in which people can connect to God despite their inability to read the scripture.

Iconoclasts believed that in representing Jesus, icons were separating or confusing the human with the divine; wood and paint were insufficient for the canvas of spiritual representation. The only real image that would serve as an exact likeness would be made of the same divine material, which is inherently impossible. Thus any representation was an empty rendering of the divine, and meaningless. Iconoclasts feared that people would start conceptualizing and becoming fixated on God and Jesus based on inaccurate and incomplete representations and that these representations would turn up in inappropriate places, such as money, for example. In this sense, Jesus/God would become their own respective simulacrum, and spiritual meaning would cease to exist.

I think what Baudrillard is trying to do here is produce another metaphor for how the simulacrum has overrun reality besides the map, which is kind of difficult to grasp at first. I think maybe an easier way to think about Baudrillard's reality (sorry if this is weird) is in his discussion of pornography. It is a representation of a (hopefully) physical, emotional and spiritual act. Yet in porn it is represented mostly in a physical manner. Being totally staged, the emotional and spiritual elements (re: the "meaning" of sex) are lost. Furthermore, porn = $$$$ ; thus sex becomes commodified in this representation (much like when Jesus was placed on the coin in 695). Thus, adolescents watching porn (or even R rated movies representing the act of sex) come to grasp sex in the completely false way it is represented, as a physical act of pleasure-seeking, rather than any sort of meaningful experience.

Even though we are "aware" that porn is "not real" it still contributes to the simulacrum that is sex in today's society (all over billboards, etc). Our idea of sex is influenced and manifest in our minds by the way we interact with it via media. His argument, of course, is that media -- in the sense that is acts as a medium between subject and object representation (82) -- is dead, and that because of our saturation in false, depthless (or incompletely represented) images, we are doomed to experience only a hyperreal, immature sexuality; our generation can never hope to have an authentic sexual experience in our lifetimes.

So damn American Pie! (no, wait, damn Baudrillard)

In my humble opinion I don't think the Iconoclasts were so far off the mark, but I think Baudrillard takes their ideas a bit to the extreme. We are also influenced by other facets of life: values & spirituality, etc. while of course they may be influenced by the media or society, it doesn't necessarily mean they are as "tired" or "obscene" in the way advertising and pornography are (92).

I think this is a semi-accurate reading...

I think you're right to be suspicious of Baudrillard's move with the iconoclasts. Historically, no, early judeo-christian iconoclasts probably weren't acting out of knowledge that there was no reality for images to represent. Such knowledge would remove the basis of their iconoclasm, which would probably have been the second of Baudrillard's four phases (p. 6), that depicting the deity obscured it with imperfect images. I think B's point is that the idea of distorted truth isn't nearly bad enough to account for the fervor with which these iconoclasts destroyed images, that really they knew, on some deep, subconscious level, that these images masked nothing and that their unchecked proliferation would bring that fact to the fore.
But this explanation raises other questions, namely whether Baudrillard, in attributing this deep fear to early iconoclasts, has just written a (pessimistic) narrative of enlightenment in which, against and because of
our will, we've become increasingly aware of the fundamental truth underlying images.
-aha

I'm actually using this section on belief (or its simulacrum) in my thesis. Here's how I make sense of it:

Baudrillard argues that the prohibition against visual representations of the Divine in the Hebrew Bible stems from the “destructive, annihilating truth” they illuminate, namely, that “deep down God never existed, that only the simulacrum ever existed, even that God himself was never anything but his own simulacrum.” Indeed, he continues, the belief that “these images only obfuscated or masked the Platonic Idea of God, there would have been no reason to destroy them”; after all, one can “lived with the idea of distorted truth.” However, “metaphysical despair” sets in once we accept no Divinity lurks behind the images we create, in other words, that such images are “in essence not images…but perfect simulacra, forever radiant with their own fascination.
This argument captures the dialectical reversal at the heart of religious belief. In contrast to popular conceptions of idolatry, the proscription of Divine portrayal originates not in spiritual veneration but epistemological doubt. And by the same token, the incorporation of holy imagery into religious practice indicates an immutable kind of certitude. Far from vulgarizing the inherently non-representable qualities of Divinity, image-making affirms the deity’s apotheosis: Go ahead and draw pictures and write poems – nothing can change the irrevocable fact of God’s existence. Indeed, taking this reasoning one step further, I would argue for an injunction to heresy as the highest form of faith: Don’t just draw pictures of God, efface pictures of God! Don’t just write poetry about God, write slanderous poetry about God! My point is not to valorize such inflammatory hypotheticals, but rather to underscore the fundamentally paradoxical status of belief. Baudrillard’s position extends the logic of Haraway’s claim that “blasphemy has always required taking things very seriously” to its natural extreme: blasphemy has always required believing in things, in the most serious sense of that term.
Baudrillard draws on his discussion of growing indistinction between reality and simulacrum through religious idolatry to conclude that "once can see that the iconoclasts, whom one accuses of disdaining and negating images, were those who accorded them their true value, in contrast to the iconolators who only saw reflections in them and were content to venerate a filigree God. One the other hand, one can say that the icon worshippers were the most modern minds, the most adventurous, because, in the guise of having God become apparent in the mirror of images, they were already enacting his [sic.] death and his [sic.] disappearance in the epiphany of his representations."
Within the terms of Baudrillard’s framework, however, the icon-worshippers are not enacting God’s “death and disappearance,” but precisely the opposite: their revelry in the production of human-made images reinforces the holy status of Divinity. Indeed, of the two groups, it is the iconoclasts who exhibit the more so-called “modern” predilections. Their refusal to artistically depict God indicates a tacit fear that such depictions might supplant the Divine reality, or worse, that no such reality exists or has ever existed. (By the same token, atheist-rationalists, especially of the foaming-at-the-mouth, Sam Harris or Richard Dawkins variety, are the least “modern” minds, in Baudrillard’s sense above: their closeted theism, or fear of theism, comes through in their unwillingness to blaspheme against their own scientific episteme.)
It is important, for my purposes at least, not to let this analysis re-inscribe the engrained anti-Semitism of ostensibly "neutral" theology - i.e., Christians are certain of their faith and therefore create images of God, whereas Jews are insecure and therefore ban such creation. In fact, if we apply equivalent reasoning to the tension between spirit and law that defines the Christian break from Judaism, it becomes clear that the bias cleaves in precisely the opposite direction. The Pauline “liberation” from the law signals a profoundly neurotic understanding of the Divine; moving “beyond the law” only becomes recognized as necessary at the moment when we begin to doubt the possibility of maintaining faith in God despite the law. Pauline doctrine begins from the tacit assumption that law obscures God, the ultimate endpoint of which is that God is nothing but an amalgam of laws, which is to say, God does not really exist. In contrast, the Jewish answer to the spirit-law “problem” is far less circuitous: it doesn’t matter how many laws are enacted, even if they appear ridiculous to the outside observer or even ridiculous to ourselves, since God always operates behind and above the law. In this sense, the mutually tension-ridden foundations of Judaism and Christianity become apparent: Jews prohibit art but affirm law; Christians affirm art but prohibit law (which is the “obscene” reformulation of the valorization of spirit). Both exist in constant tension apropos of their epistemological status.

Hopefully this will be of *some* interest to people outside of religious studies.