My friend said  [paraphrased] 
"When a government entity allows a Confederate statue on public property, the message of that statue becomes government speech and government speech should not represent traitors of America."

I say this is a mistaken understanding of American government.  Government was never instituted to be a master over the people.  Government was instituted to vouchsafe the rights of the people; the government has no rights, only obligations.

Firstly, Abraham Lincoln said at Gettysburg that the Union fought the war so "that a government of the people, by the people, for the people shall not perish from the earth".  Therefore, if we postulate that our government is indeed of the people, then government, as an entity, has no speech it's own; the people's speech is the government's speech.

Secondly, United States Supreme Court Justice Salmon P. Chase said, in 1865, concerning the arrest of Jefferson Davis: "His arrest was a mistake.  His trial would be an even bigger one.  We cannot convict him of treason, for by the Constitution secession is not treason."   Treason, by definition, is an attempt by an armed faction to overthrow the current government and replace it with one of their own liking.  But the South did not wish to overthrow the government in Washington, D.C.  It simply wished to leave the union, form it's own government, and live together peacefully with the United States.  The North would have been wise to say to the thirteen states in rebellion, "If you no longer wish to live in the same house with us, then go in peace, and may we both become great nations."

Thirdly, it is said by some that this statue is "offensive to some people".  Supreme Court Justice Antony Scalia said, “when government bans certain conduct precisely because of its communicative attributes, that regulation is unconstitutional."  I believe Chief Justice Warren Berger said it best in Cohen V. California (1971) when he said, "One man's vulgarity is another man's poetry".  In America, even offensive speech is protected speech under our Constitution until it conveys what our judiciary calls "fighting words".

I titled the above photo "America" because to me it conveys the concept that two people, even two people with opposing viewpoints, can coexist peacefully together and respect one another's rights in America.  I may not agree with my friends message on his sign, but I will defend his Constitutional right to stand in public peacefully and hold it.  To do otherwise would make me a traitor to my oath.

If a protestor can burn America's flag and call it "Constitutionally protected free speech" (Texas v. Johnson, 1989) then he can walk past an inanimate Confederate statue and understand that is Constitutionally protected free speech as well.  The fact that someone is offended is of no consequence under the law.  The U.S. Constitution is not constrained by emotions.

I, ______, do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same... So help me God." ~ Raleigh NC, 1988