to stress a few points of emphasis...spellcasters of any sort, divine or arcane are not trusted, they are actively hunted by the nearest Clericy and their Inquisitors
First, wouldn't any nation that failed to conform to this culture have a massive advantage over anyone that did? If a hypothetical nation, lets call it Starkoverhill, declares, "Free refuge for all spellcasters.", considering how powerful magic is in D&D, then it's quite possible that if the entire rest of the world declared war on Starkoverhill, that Starkoverhill would still win that war.
Secondly, when you say "divine spellcasters" the first thing that comes into my mind is clerics. I'm not really clear on whether you are saying clerical divine spellcasters are not trusted, or not. But if you are saying that clerical divine spellcasters aren't trusted, how does this work or how did this come into being? Are you saying that the vast majority of the population choose to distrust the very people who could heal their diseases, raise their loved ones from the dead, cure their wounds, bless and prosper their crops, and choose to trust the people who could not perform those miracles? That seems a pretty strange situation.
Finally, while on the one hand I want to applaud you for trying to work out a more realistic situation than you are apparently accustomed to, but in many ways I think you are overreacting with simplistic stereotypes. Perhaps in play it won't work out as simplistic and one dimensional as it is coming across in your descriptions of your ideas, but in a world where magic is real I think people are going to evolve to a more nuanced situation than either 'Magic-Marts' or the sort of Dark Ages stereotype you describe. I think you really need to start thinking about what happens when societies question the assumptions you've made. As a simple example, suppose some evil aligned culture decides to welcome spellcasters into their midst rather than reviling them. This culture, whether its goblins or just a ruthless nation, will have a huge advantage over their rivals while at the same time appearing to any spellcaster to be more tolerant and welcoming than their own hostile, belligerent, and violent culture. It would be easy to assume that they are no worse than ones own culture in a case like that. Or what happens when a culture is actually taken over or conquered by a spellcaster of great power. His foes will have relinquished their most potent means of combating the threat he represents.
I think that the long term stable situation is probably not what you describe, but some equilibrium where spell-casters are given respect but expected to act responsibly. And if they will not act responsibly, then sure, they burn them at the stake. As for your fears regarding how a society would respond to threats like charms and enchantments, or illusions, the best responses to those threats aren't simply to try to crush all spell-casters, but to devise cheap protections. For example, a crown which granted a permanent 'protection from evil' to its wearer, would block most forms of enchantment. A court could be enchanted such that any time a spell was cast within it, an alarm of some sort would sound. A court magician could then quickly cast detect magic, which even a 1st level wizard of little threat to the sovereign could manage, to determine the source of the lingering aura, and by this means no spellcaster could get away with threatening the King. Likewise, scales could be easily devised so that any object with a magical aura on it would trigger an alarm, foiling most attempts to fool the merchant. These do not require powerful magic, and would be long enduring to be passed down from hand to hand over decades, so any well appointed shop would likely be able to afford such a device and thieves would of course have to assume such protections are present. And so on and so forth. In short, a society would meet the threats of magic by leveraging magic of their own, and societies that acted in this rational manner would be far better equipped to actually protect themselves from rogue wizards and sorcerers than those that simply tried to oppress all magic.