I've always thought of that as an Americanism - the Irish I have known have been quite happy to swear properly the way God intended. But the "Irish Americans" have evolved mostly independently from the real Irish over the last hundred years or so (I'm guessing that as a an average timespan), so it is entirely plausible that the two linages have diverged here.
(The case of "s*it" and "s**te" is different, since these are both equally "bad" - they are not cases of "I want to swear but I don't want to sin".)
In Norwegian, the word "skitt" (pronounced "s*it") means dirt or clay, and is also used for modelling clay or Playdough. And the verb "å skille" means "to separate". It's all connected.
Another fun etymological example in Norwegian is the word "gift". It means "poison" and "married" :-)