The other half of the story is the other way up. That is, Le Guin's narrative presents pre-classical religious ideas as superior to modern god-based religious ideas. With these goggles on our culture is the inferior one. I am simplifying but that's my general idea of what she is saying, and I agree with it.
There's almost a Whig view of religion, like the Whig model of political progress. This envisages religious development like a pyramid. Before civilisation there are thousands of local gods, then these are consolidated into city gods, these in turn consolidated into a well-defined Empire-wide pantheon, and finally we - the fruit or blossom of history - achieve a vision of a single monolithic god who 'rules' all men. Modern atheism makes sense within this pyramid model: it knocks the single top god off the pyramid cap, and thus repudiates the entire story.
The model I think Le Guin is using in these stories - she didn't invent it of course - is that pre-modern spirituality can't be properly understood by imposing modern models of gods as Big People who have likes and dislikes and inflict punishments and give rewards. Even modern ideas of atheism vs faith don't make sense in this context, just like they aren't really issues in older cultures. Certain 'Powers' exist, they are not human, they may or may not be capable of being communicated with (they may be natural forces such as seasonal change). Acting appropriately towards these powers, such as honouring them, makes us live better. That is the model of pre-urban religion in a nutshell. What 'gods' there are, such as rainbow serpent or raven, are more like story-figures, they aren't Big People who will punish us.
For some reason, I think to do with social change, existing models of religion don't suit all of us that well. The pre-modern models have a lot to recommend them in my opinion.