I don't think the point of this lawsuit is clear to all people reading this thread. This isn't about a bunch of atheists who are mad at seeing the word 'God'; the problem is that the word 'God' would be on a government building.
No one would sue a church even if it had the words 'In God we trust' written all over it a thousand times. But by putting it on a government building the government endorses one belief system over all others. So it's not about offended sensibilities.
The fact that it is the national motto also does not make the phrase immune to criticism. In fact it makes it worse because that in itself is an endorsement of one religion by the government, and it does actually imply that anyone who does not 'trust in God' is un-American, or less American than those who do.
Phrases like 'Freedom of religion, not from religion' also imply that atheists shouldn't be treated the same as religious people.
And finally, concerning 'atheist propaganda': is the absence of the word 'God' really atheist propaganda? Or is it just a blank wall?