It is easy to understand how this deep split has developed over time.
The Early Reformation (c. 1500-1700)
The first wave of the Reformation was a reaction to widespread sloth, dereliction of duty and corruption in the European Churches, built up through centuries of doctrinal disputes, money grubbing and power mongering , in the face of external threats, economic disasters, massive plagues and spreading illiteracy.
The 'lucky' combination of the new independence of local 'kingdoms', the importation of paper-making, the invention of efficient printing (movable type), and the deep faith of the Middle Ages made possible the mass distribution of Bibles, and a sudden increase in general literacy and interest in religion and science.
From the beginning however, the Reformation itself was plagued by inner divisions, heretical nonsense, and stubborn bigotry and ignorance. The seeds of fracture and failure were sown from the start. At the same time, men were inquiring and investigating issues of history and science, and knowledge of the natural world expanded rapidly.
More and more of religious thought and belief, once taken for granted, was placed in the skeptical light of human investigation and challenged by suspicion and doubt. The Enlightenment era and the following period of Rationalism and historical inquiry seemed to leave traditional Christianity in a shambles of confusion, and opened the door to complete independence and rejection of all things religious, in favor of strict natural science.
The Second Reformation (19th - 20th cent.)
In parallel with the rising apostacy of the 19th century, large groups of people still seeking religious answers joined various cults, led by an ever increasing fountain of charismatic religious leaders. New cults and denominations were invented as fast as men could start them.
The turn of the 19th/20th century not only saw the founding of a dozen large denominations, but also of less rigid and more vague movements, such as the Pentecostal and Evangelical and Charismatic branches of Christian thought and life.
Prior to this, in reaction to the conservativism and bigotry of the day, a significant number of Christians turned to the Unitarian movement and train of thought, in which even basic doctrines like the Trinity and the Deity of Christ were considered suspect and unimportant, and the social gospel was given higher priority. This was often a good thing, as issues of poverty and maltreatment of children, the abolition of slavery, the emancipation of women, and education took center stage in political and community activity.
But the seeds of religious doubt and apostacy were deeply sown into Western culture. The German 'rational'/skeptical approach had done immense damage to the traditional Christian worldview.
The Attack on the Traditional Christian Bible (1830-1970)
In hand with this heavy skepticism came repeated attempts to 'renovate' the Bible, especially the New Testament, in a misguided effort to remove 'Roman Catholic alterations' and superstitious nonsense, leaving behind a supposedly reliable 'historical' core. The various early copies and translations, and quotations were sifted for differences in wording or 'holes' indicating something might have been added later. In a few cases (i.e., 1st John 5:7 etc.) it did indeed look as though a zealous bishop or misguided scribe had inadvertantly added something to the text. This gave a 'smoking gun' look to the problem, and encouraged a near-hysterical suspicion of standard Christian texts and doctrines.
A few of the oldest manuscripts (c. 4th century) also presented a significantly truncated text, missing a few large sections like Jn 7:53-8:11 and the Ending of Mark (Mk. 16:9-20), and many shorter segments. This led rational-minded critics to class these passages as deliberate "additions" or "interpolations" into the traditional text by scribes or editors. The summit of this tendency to favor the shorter text came with Westcott & Hort (1882) and the Revised Version.
Those who favored this approach were for the most part Unitarians and fringe-Christians who had their own ideas about what early Christianity must have looked like, before the alleged accrual of 'later Romanist doctrines'. The Unitarian movement lived on for quite a while in American Universities and Seminaries, being an attractive compromise between modern historical science and ancient religious ideas.
The new Textual Critics became stubborn and dogmatic in their own position, insisting that the 3rd and 4th century ecclesiastical texts were the 'original' readings, and the traditional text used by the majority of Christians for the last millenium was a later artificially fabricated edition.
The trouble was, these earlier texts also showed all the signs of being ecclesiastically managed and edited texts manufactured in the 3rd century for liturgical use, and subject to the activities of unknown editors and 'correctors'. Their own credibility as 'primitive' texts was clearly shattered by their own appearance, features and their date of manufacture.
The Attack on the Christian Old Testament: (c. 1900-1970)
The academic 'attack' upon the traditional Christian Bible did not stop however, but turned with new energy to the O.T. text. The first probable error in the early Reformation had been the uncritical adoption of the Medieval Jewish O.T. text by Martin Luther, following the example of St. Jerome (c.400 A.D.), in an attempt to convert the Jews of Europe. When that failed, Luther became vitriolic, publishing slanderous pamphlets against the Jews, and helping to feed the growing wave of European anti-semitism which led to Hitler's insanity.
By this time however, the damage had been done, as Protestants everywhere followed Luther's example and adopted the Hebrew O.T. in preference to the ancient Greek O.T. that had been approved by the early Church and used for nearly two thousand years. This movement began in Germany and continues to be driven from there today, in part buoyed by Roman Catholic scholarship and support.
Partly as a backlash from the disaster of World War II (i.e., guilt re: the Holocaust), Christians in the West continued in a rather futile 'dialogue' with modern Jews, toning down their dreams of 'converting the Jews', and essentially capitulating to Jewish ideas about how the O.T. should be translated and interpreted. (The 'Dean' has blogged on this subject).
This movement to Judaize the Christian O.T. was spearheaded by Bruce Metzger and those sponsoring the Revised Standard Version (RSV), which was revised and repackaged repeatedly to disguise its source and purpose (as the NRSV). Metzger was also heavily involved in continuing to promote the truncated and mutilated New Testament of Hort and others who had abandoned both traditional Christianity and the traditional text.
The Modern "Evangelical" Position:
Now the battle has moved to America's Christian seminaries and Christian Universities, which were formerly independent of the secular University system, but in seeking recognition and legitimacy by secular academia have adopted many of the positions and attitudes of secular Biblical scholars.
The modern "Evangelicals" are nothing like their original founders, all of whom held strong beliefs in the primacy of the Holy Scriptures, and who rejected mutilated versions of the N.T. like the RV, and similarly perverted versions of the O.T. like the RSV and NRSV.
The modern "Evangelical" Movement seeks recognition and respect from academia at large, and has essentially switched over to the secular academic position:
(1) There is no "Divine Inspiration" for the Bible entrusted to the Church. Whether or not the 'originals' were inspired, the current copies of the Holy Scriptures are not inspired, nor are they necessarily reliable copies of the originals.
(2) There is no "Divine Preservation" of the text. They have been subject to the whims and random chance that all secular hand-copies of early books have been subject to. Its full of errors, both historical and docrinal.
This sadly, is the modern "Evangelical" position. It resembles nothing like the vision and faith of the early Reformers, and it resembles nothing like the positions of the original Evangelicals of America.