Really? Please cite how exactly Saudia was planning on doing any of that??!!

I have flown Saudia many times and been to KSA more times then I can count. I have never seen Saudia ask nor care what the religions or nationalities of their passengers are/were (except for citizens of Israel, but more on that in a minute). Now, some people were influences by a panicky false e-mail that made the rounds quoting a LA councilperson or California state Senator, or some other extremely minor politician, and that made the rounds, and was quickly disavowed by many that carried or transmitted it.

The issue has to do with visas.

1) A person wishing just to transit KSA needs no visa so there is no issue.
2) A person who wishes to visit KSA needs a visa and must have a real purpose to go there and therefore be invited. KSA generally has no such tourist visa category.
3) They ask religion on their visa forms, if you do not fill it in, you will get a visa. If you fill it in as Jewish, you probably will STILL get a visa. If you fill it in as Shi'a you also may not get a visa these days.
4) If you have Israeli stamps in your passport you may be denied entry.

I should mention that I know at least a half dozen Jewish people who regularly do business in KSA and have never had an issue, one of who also regularly frequents Israel.

Now I can name a couple dozen other countries that have similar provisions on their books against those who have Israeli stamps in their passports, the vast majority do not enforce them and for that matter this has been an issue for so long that it is why many ask for their Israeli stamps on a separate piece of paper and why the Israelis regularly do this.