Having been Protestant for a little over half my life (at this point), I can tell you that the observation, while it may be true from a strictly numbers perspective, is a grossly inaccurate representation of the situation. The 40,000 argument relies, in part, on the perception that, to be counted as a Protestant group, there must be organizational unity. That perspective works very well when speaking of the Catholic world, but it doesn't work in reference to the Orthodox world, let along the Protestant.
It is fairer to speak of doctrinal positions than churches when one is approaching the Protestant world.
The various positions that one finds are
- What is Communion? There are three positions - consubstantiation, spiritual, and memorial. I know of no case, however, where a denomination requires on position over another. It is therefore not a cause of division.
- The proper recipient of baptism - infant or believer only.
- Predestination vs. Free will - or Calvinism vs Arminianism
- Church government - congregational, presbyterial, episcopal.
- Understanding of sanctification and means of achieving it - some teach that entire sanctification is possible in this life
- Charismatic or not
- Ordain women
- And, today, prosperity gospel or not.
Yes, I could have added Eschatological views, but I don't know where that's a cause for division among denominations.
So, that leaves us with 386 possible variations, not 40,000. To that 386, I would add one other variant - liberal theology.
My purpose is not to deny that the Protestant world is splintered. It's to call Catholics to a fair view of that splintering.