That may or may not have been a historical reality. But the historical reality of the Reformation is that it was a theological event. True, there were moral consequences, but the Reformation wasn’t first of all about moral self-improvement and tidying the ecclesiastical house. It was about aligning the church's doctrines with Biblical teaching.
It was this that prompted Martin Luther later to comment:
Life is bad among us as among the papists. Hence, we do not fight and damn them because of their bad lives …. I do not consider myself to be pious. But when it comes to whether one teaches correctly about the word of God, there I take my stand and fight. That is my calling. To contest doctrine has never happened until now. Others have fought over life; but to take on doctrine—that is to grab the goose by the neck! … When the word of God remains pure, even if the quality of life fails us, life is placed in a position to become what it ought. That is why everything hinges on the purity of the Word. I have succeeded only if I have taught correctly. (Cited by Steven Ozment, "The Age of Reform, 1250–1550: An Intellectual and Religious History of Late Medieval and Reformation Europe" (New Haven, Connecticut: Yale University Press, 1980), pgs 315-316 (emphasis added).Several years ago, Scott Clark provided a little bit of history about how Luther came to realize this.
The Reformation doctrines [took shape in Luther's mind] gradually between 1513-21. In succession, and with fits and starts, Luther gradually realized the great Reformation solas. There are some Reformation solas with which we’re not all familiar. Luther’s first breakthrough happened during his lectures on the Psalms when he realized that Scripture teaches that we’re not just a little sinful but that we’re completely sinful, i.e., that the effects of sin are radical and affect every faculty. We’re not able to “do our part” or to “do what lies within us” toward justification because, as a consequence of the fall, all that lies “within us” is sin and death. Therefore the first Reformation sola was “solely unable.”This is really what Matthew Schultz is trying to say in his conversation with "Lyin' Bryan Cross".
This is the essential assumption behind sola gratia, the claim that justification is by grace alone. Grace, is no longer to be reckoned a sort of medicinal stuff with which we are injected, with which we cooperate toward eventual justification. Luther came to understand that grace is God’s attitude of favor toward sinners. Grace isn’t something with which we are infused. Rather, God is gracious toward us. He shows us favor. He gives to us what we do not deserve: righteousness and life.
Only then did Luther realize, as he next lectured through Romans that it was only by the imputation of the righteousness of Christ that we are justified. The entire medieval system was about interior moral renewal. The Reformation is that the gospel is outside of us. The Gospel is that Christ has done it all for us. Justification is solely on the ground of imputed righteousness.
During his next two sets of lectures in Galatians and Hebrews Luther gradually realized that the medieval definition of faith as “formed by love” (fides formata caritate) is false and a misreading of Gal 5. Faith doesn’t justify because it produces sanctity (holiness) in internal moral renewal. Faith justifies because it apprehends Christ and his obedience and death for us (pro nobis). This is solus Christus. Faith is an open, empty hand. Faith is a beggar. Faith looks outside of itself and one’s self to Christ. Faith has no power except Christ its object. Faith is receiving and resting on Christ and his finished work for sinners. Faith is a certain knowledge and a hearty trust in Christ and his gospel. That’s sola fide.
With these breakthrough conclusions came others. During this period Luther came to a new hermeneutic. Where much of the patristic and all of the medieval church had read the Bible to contain two kinds of law, old and new, Luther came to see that the Bible had throughout two kinds of words: law (do) and gospel (done [on our behalf]).
The gospel is not: here is more grace so you can keep the law. The gospel is not: Christ will approve of you if you do your part. The gospel is: Christ has done it. This turn to the law/gospel hermeneutic was a foundation stone of the entire Reformation and it was adopted by all the Protestant churches and confessions Reformed and Lutheran. One of the great tragedies is that today there are congregations that will celebrate Reformation Day or who celebrate a nearby Reformation Sunday who will look you straight in the eye and tell you that the Reformed don’t use a law/gospel hermeneutic.
Another global change that occurred at the same time is the turn to Scripture as the magisterial and unique authority for faith and life: sola scriptura. There’s no one point at which this view developed, but it’s certainly symbolized by Luther’s stand for the sole and unique magisterial authority of Scripture at the Diet of Worms in 1521. Again, the tragedy of this day is that there are Reformed folk who sincerely believe that an Anabaptist hermeneutic or corruption of sola scriptura (biblicism) is the “Reformed” hermeneutic. They believe sincerely and wrongly that it means I and my Bible deciding what is and isn’t true.