Obviously, you've never been to the People's Republic of Maryland.
Seriously though...
I am by no means a devout ANYTHING, and I consider myself to be rather socially liberal. That said, I respect the right of any PRIVATE institution to incorporate their beliefs as they see fit - even when it comes to admissions. If a group of atheists were to get together and come up with the budget required to start a medical school, acquire licensure/accrediation/whatever it takes to become a legitimate institution for medical education, and preach atheistic dogma to students/expect students to uphold their particular atheistic standards, I highly doubt there would be much objection. Medical schools like Georgetown, Loyola, etc. have been in operation for years - I don't see why an atheist institution would present any problems. However, as "atheism" isn't an organized religion on the scale of the Catholic church/insert other organized religion here, it would probably be difficult to come up with a suitable atheist curriculum and set of policies that all atheists agree upon. As a matter of fact, as I see it, most state-funded medical schools ARE atheistic in terms of policy. There are no religious beliefs/lectures/expectations/etc. tied to admission, curriculum, or clinical training at these institutions.
Furthermore, these religiously-affiliated schools do not require that you convert to their beliefs - they simply require that you respect them and abide by their policies. Other non-religiously affilitated institutions have strict rules and regulations that students must follow - USUHS comes to mind.