The current issue of Modern Reformation has a sharply focused article by David R. Nienhuis titled “The Problem of Evangelical Biblical Illiteracy : A View from the Classroom” - of course, the problem is widespread and not limited to evangelical protestants.
To a large extent, the problem is not biblical literacy but literacy in general in this age of soundbites and 30 second arguments. Nienhuis gives a vivid portrait of a culture that trains folks to quote rather than to read.