Luther was one of a number of imperfect men many who corrected Rome but which entity reacted according to the flesh, while you have simply ignored what i said in this issue regarding Luther and the establishment of truth under SS.
But I also think he took a wrong turn which was calamitous for Christendom. Because of him, millions died, in part because in repudiating the pope he left Christians in the hands of the civil authority,
The peasants war was unfortunate and had deep causes as a result of the state of Christianity under Rome, while Protestants had much to unlearn from her, and if Luther has slain his relative thousands then Rome has slain her ten of thousands.
Because Rome was the civil power, formally or effectively, far more died than thru Luther, with popes using of the sword of men to deal with theological nonconformity, and sanctioning torture even for witnesses, and death for many who in good conscience believed in some way that Rome found offensive, even if sometimes she latter conceded they were unjustly condemned. Yet in this case she blamed that on "her children," not the popes whom they followed.
The fact is that Christianity being the civil power, ruling over those without, and using its sword to deal with theological opposition, is not Scriptural. The NT Lord stated His kingdom was not of this world, else His servants would fight after the felsh, (Jn. 18:36) as Rome supremely exampled.
For in contrast to her, and early Prots which had yet to forsake her ways in this regard, the apostles did not seek to rule over "those without," as they did not "war after the flesh," but by spiritual means, and discipline of the church was the same means, as that realm is where the real battle is.
"For though we walk in the flesh, we do not war after the flesh: (For the weapons of our warfare are not carnal, but mighty through God to the pulling down of strong holds;) " (2 Corinthians 10:3-4)
"By pureness, by knowledge, by longsuffering, by kindness, by the Holy Ghost, by love unfeigned, By the word of truth, by the power of God, by the armour of righteousness on the right hand and on the left, " (2 Corinthians 6:6-7)
"For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places. " (Ephesians 6:12)
"In the name of our Lord Jesus Christ, when ye are gathered together, and my spirit, with the power of our Lord Jesus Christ, To deliver such an one unto Satan for the destruction of the flesh, that the spirit may be saved in the day of the Lord Jesus. " (1 Corinthians 5:4-5)
"For what have I to do to judge them also that are without? do not ye judge them that are within? But them that are without God judgeth. Therefore put away from among yourselves that wicked person. " (1 Corinthians 5:12-13)
"Holding faith, and a good conscience; which some having put away concerning faith have made shipwreck: Of whom is Hymenaeus and Alexander; whom I have delivered unto Satan, that they may learn not to blaspheme. " (1 Timothy 1:19-20)
To the state is the use of the sword of men sanctioned, (Rm. 13:1-7) and while it may indirectly support Christian faith in "the punishment of evildoers," (1Pt. 1:14) such as against theft, etc., yet the church is not to look to the state to deal with theological dissent or rely on the sword of men to do so (nor should the state have to stand where it ought not in dealing with sin in the church due to the failure of the latter to police itself), or be raising church armies to regain land etc. Its prayers ought to be able move the powers that be in the position to intercede, according to the will of God, versus the church being that civil power.
God has so constituted the church that it must have spiritual power, manifesting that it is the church of the living God, not its institutionalized counterpart, and not rely on the arm of flesh to fight its battle.
in every Protestant state, and indeed every Catholic the Church became more than ever a tool of the state.
Rather, the loss of the civil power of Rome, such as seen in the Inquisitions, with the state being a tool of Roman institution (not the one true church), and which loss you seem to lament, was not Scriptural to begin with, while following the Scriptural model of separation of powers worked contrary to your allegation, as the church gained more autonomy, while the state reflected its basic faith in its judgments, as seen in America for much of its history.
The modern declension is a result of the church losing it salt, and becoming more like the surrounding society, as Rome did in becoming like the empire in which it found itself. And today what Catholicism overall fosters is liberalism, being much less conservative than her evangelical counterparts.
In short, Luther caused a civil war in Christendom.
"For there must be also divisions among you, that they which are approved may be made manifest among you. " (1 Corinthians 11:19)
As a precursor to the day when the chief shepherd divideth his sheep from the goats. (Mt. 25:32) Considering even the moral state of Rome esp at the time of the Reformation, and her recalcitrance, division became necessary, though the EOs preceded the Prots, as Catholicism itself exists in sects and divisions.
But as God can raise up children to Abraham from stones, (Mt. 3:9) and the church is essentially a spiritual entity into which the Spirit baptizes members upon conversion, (1Cor. 12:13) with its authenticity not resting upon formal descent, it continued despite the poor condition of the church of the organic church and divisions, existing among a relative remnant.
And which true church as the body of Christ continues, because God raises up stones who profess the essential faith upon which the church is built - by extension that being Christ - even though those who sit in position so power often oppose them. For thus the church began and thus it is often preserved. Thanks be to God.