Was St. Augustine wrong in abolishing the second commandment in favor of pagan idolatry in the Church? Why or why not?
The division and numbering of the Commandments have varied throughout the centuries. The numbering that is common within Catholic teaching is that of St. Augustine, which differs from other Christian formulations found among Orthodox Churches and Reformed communities (Catechism 2066).
Concerning the commandment in question, Augustine saw it as merely an extension of the first: “You shall have no other gods before me” (Exod. 20:3). In light of the context, it seems Augustine was right, for immediately after God prohibits “graven images,” he says, “You shall not bow down to them or serve them” (Exod. 20:5). The prohibition is idolatry, which is the same commandment as the first.
Augustine would also distinguish between “You shall not covet your neighbor’s house” and “You shall not covet your neighbor’s wife” as two distinct commandments. Sure, covetousness is the subject of both commands, but the object of coveting is not. Your neighbor’s wife is not merely a material good like your neighbor’s house.
For more details, see Tim Staples’s article “Did the Catholic Church Change the Ten Commandments?”