This is a very interesting topic. I’m sure my reponse will be viewed as controversial, however, I mean no disrespect. I’m merely attempting to submit to the Holy Spirit and allow Him to lead me to a true understanding of His Church.
Protestants are wrong on sola scriptura and they are wrong on sola fida. The view of “once saved, always saved” often leads to license and a lack of emphasis on holiness. They are wrong in their proclivity to self-style their faith, disregarding history and the tradition of the early Church fathers. And they are wrong with regard to the sacraments. There are other lesser points, but I think I’ve covered the main errors.
But, not only is God allowing the Protestant heresy to continue, He is blessing them. People are getting saved, they are growing in their relationship with God, they are submitting to the Holy Spirit, and they are producing good works, such as helping those in need and such as evangelism.
I belive God is blessing Protestants for 2 reasons:
As Bengal_fan pointed out conservative Protestants and Catholics have far more in common than that have disagreement.
I believe that the Catholic Church is in need of further reformation. I know that cradle Catholics mistrust Protestant converts and have a fear that the Church will be highjacked by them. But most Catholics will admit that, while Luther’s schism was inappropriate and damaging, reform WAS needed in the Church. They will admit that Catholic reform was a positive outcome to the tragedy of that schism. There are things about Protestantism that cradle Catholics have a hard time understanding, which makes it difficult to understand why God allows this great schism to continue. If Catholics really want to understand why the Protestant heresy is successful, they need to listen to converts from Protestantism.
In my humble opinion, God is blessing Protestants because they are, in some areas, doing things better than the Catholic Church. They emphasize the personal relationship with God and they also have a view of relative safety in that relationship. I used to be Calvinist and no longer am. As a Catholic I, of course, believe one can lose his salvation, but to grow in a relationship there needs to be relative security. Without a measure of security, trust cannot develop. Catholicism is very legalistic and the applications of its teachings lead to the conclusion that one can lose his salvation very easily.
Another problem I see is an excessive use of authority on the Church’s part. Submission to authority is very important and rebellion leads to schism and lack of unity in the Body of Christ. But the Church uses this authority in a very intimidating and threatening way—it almost seems for the purpose of manipulating people into submission.
Until legalism and misuse of authority are reformed, I believe God will continue to greatly bless our Protestant brothers and sisters.