Freedom of association is a two way street. People are free to boycott this store, and I am sure the public outrage and typical hysterical reaction of the media will be more than enough to take down this sign.
Are you being serious?
Partly. I don't want to see the Civil Rights Act repealed, though in an ideal world, people should be free to discriminate in their personal lives if they choose to live life like an ass-wipe. CNN will talk about this story for a week, people will shame the owner, and the sign will come down. It's a pretty simple chain of events.
You could also legalize punching your customers in the face under the same theory.
As for freedom of association, that's not under threat here. This person opened a store that caters to anyone who walks by. So, he chose to associate with anyone who walks by, aka the general public. Running a store is not "your personal life" at all. It's public.
I walk by the local country club a lot. But I can't golf there whenever I want. The owners of the country club "associate with the general public." What is the difference? They both are private, for profit establishments and should be allowed to cater to whomever they want.
The country club owner is clear from the beginning that the business does not intend to serve 100% of the public, and defines clear requirements for membership that can be met regardless of sexuality.
The Hardware store owner serves everyone for x years, then suddenly adopts a new requirement for service that certain people cannot meet because of how they were born, as a clear overreaction to a court action that he disagreed with yet had absolutely nothing to do with his business. If he had been asked to come to a wedding and perform a service, or if he had been asked to make something that had an explicit "gay" theme, that's one thing and I think there are legitimate issues of religious freedom to address there. But that's not what is happening here.