Who does the labeling? Go to your local bookstore and ask–they have them separated by genre there. Scary thought–book labeling is happening by genre already
Stereotyping applies to members of a group–as in people. Many products are sold by the category they are in–god help us all if we can’t go to a Blockbuster and find a movie in the horror section, the mystery section, the drama section, etc. When you go to the grocery store, all the cereals are together, as are the juices, etc. These are products not people and it only makes sense to label by genre for readers’ interests. Calling a book "Christian" or "Religious" is not offensive or censorship. To ban it from the shelves would constitute censorship or to omit parts of the text. There is no need to call it offensive, but most definitely a need to distinguish what type of material it contains.