I can agree with that.
God as an idea is real in the abstract sense that all powerful ideas are real, and people believe in them, and treat them as real.
But as someone who was raised in a (Christian, US Southern) religious background, I've come to believe that everything wrong with religion comes from taking it literally.
But not all religions are created equal. The Protestant religions are emasculated to some degree. Since they're based around rejecting the truth, their foundation is all wrong, and they can never get back to reality. Unfortunately, they turn many people away from Christianity.
But that's not necessarily true. Those who keep looking for it will find it in Catholicism, just like John Henry Newman did. As he said, "to be deep in history is to cease to be Protestant." But more often, people don't really want to find out the truth. So they reject religion altogether. Except as a psychological tool.
As I'm sure you understand every religion is (among other things) an attempt at distillation of important perspectives and wisdom to help coming generations. So, I would not say "sad" by any means, well, except when misused.
I don't know much about the Protestant / Catholicism schism, but it sounds pretty heated. Though, as an outsider, I'd peg them as sects rather than separate religions. Heck, I'd lump all the Abrahamic religions together into a single clade as they share some bits of the same holy books.
I don't disagree, but would only refine your point.
I think the pathology of religions come from several places: the inevitable divide between the environment in which they were written and the current world and not refreshing that original view quickly enough with enough wisdom, the projection of one's ethics on to other people, and, like you said, mistaking the metaphorical for the literal when it is not adaptive (which is difficult as sometimes feedback can take decades if not generations to hit).
IMHO religions are like Swiss army knives. They've got a huge number of blades and tools. Idiots use Swiss army knives like a hammer and bang away and their problems. People that have only seen it used as a hammer miss out on its finer wisdom. And if one gets stabbed with it they're less likely to look openly upon the tool or kindly upon the user.