At the Diet of Worms, Luther was given the opportunity to explain how his heresies could be compatible with scripture. To make his case, Luther dismissed as non-scriptural not only the seven books of the deuterocanonicals and select passages of Daniel, but also James, Revelations, 1-2-3 Peter, 1-2 John, and Hebrews.
Even though most Protestants would agree with certain of Luther's theses, I'm sure they would concur that his denunciation of such a sizeable portion of even the modern Protestant canon would amount to heresy. And as reprehensible as the allegations (and I do not mean to assert that they are only mere allegations) against Holzberg are, his response was entirely proper, and, in fact, should be seen as giving incredible respect to Luther in a sense: Imagine writing a letter to your Congressman, and having the letter sent to the President, who dispatches the US Supreme Court to address the Constitutional issues you raise!
As for the rough response Luther got, consider the timeframe. The Catholic Church was engaged in a terrible war with Islam to save civilization. Luther was essentially attacking the defense budget with wild slander. (His visit to Rome seems to be a work of fiction, since he described the geography incorrectly.) Armed revolution was breaking out. He was identified as a threat to the regime, and he truly was.
So was the response of the Catholic church unreasonable? Ask yourself this: what Protestants fought against the Muslims? Which German princes defended Vienna? I would submit that it is highly questionable whether The ecclesiastical anarchy of Protestantism could have saved Europe.
I'm not sure I entirely disagree. My own view is that there were merits to both the Catholic and emerging Protestant viewpoint, but it must be remembered that the Reformation was a creature of its time. Both Protestantism and the Catholic church have evolved since then, so largely this is an academic, historical discussion.
My sole point in citing Exsurge Domine was that Luther was not some guy hell-bent on schism, at least not initially. He was sort of backed into that corner.
(Did he reject the Apocrypha and the Epistles as early as Worms? That is news to me - I was under the impression that occurred later in life.)