The Protestant movement was very good for the Catholic Church and brought much needed reform.
But at the same time, try to remember that these people were locked into a huge monolith of an institution, so when they achieved liberty from the powerful Catholic Church, they were in no mind to create a new monolith.
They (or perhaps GOD) created these divisions to keep the Church fragmented deliberately, so that another horrible potential power, couldn't threaten faith anew, unimpeded by man's corruption.
Why would they just replace the RCC by another repressive institution? That would have been unthinkable!