Are denominations good? Are they bad? Are they just plain ugly?
Denominations help people distinguish theological differences. If I am looking for a church that holds to Scripture alone as the highest authority, then I certainly want to stick to a protestant denomination. If I am also looking for one that holds to believer's baptism, then I want to find a free church or a baptist church. If I want one that is paedo-baptist (infant baptism) I will look to the Presbyterian, Methodist, or Congregationalist. If I am Reformed, then usually that means Presbyterian or Congregational. If I want a high-church liturgy, then Anglican or Methodist. You get the idea. Denominations mean we are taking theology seriously. That is a good thing. To water down the message for the sake of unity is a huge mistake.
Denominations can also be bad. By that I mean evil. They can be a source of divisiveness and arrogance. When one denomination begins to think that they are the only real Christians who have a full grasp on all the truth, there is a problem. I've seen this in all different denominations. Christ is bigger than any one denomination of Christianity. Sectarianism and divisiveness are flat out evil. This falls into the "I follow Paul" or "I follow Apollos" mentality we read about in 1 Corinthians.
Sometimes denominations can just be plain ugly. People hide away in their denominational traditions and never peek out to see what else is going on in the world. It is not that people don't think there can be Christians outside of their denominations, it's just that they have no association with them. They are "American Baptists" or "Southern Baptists" or "Orthodox Presbyterian" or "Evangelical Presbyterian Church." Think about how this looks to the world. Instead of making much of our unity in Christ, we turn the church into alphabet soup: ABC, SBC, BGC, EPC, OPC, PCA, UCC, CCCC, PCUSA, UMC, CB, ELCA, IFCA, etc. (yes those are all real denominations).
Can we save the good, and get rid of the bad and the ugly? Can we do away with the bad and the ugly, and still keep the good? Only in degrees. We can get better and better.
How about a more radical idea? Be inter-denominational. Be a church that majors on the essentials, is not afraid to talk about and deal with the non-essentials but doesn't divide over them. Welcome folks to join based on the gospel essentials, but still maintain strong theological differences without dividing over them. That's what we are trying at First Baptist. We are a gospel-centered, believer's baptist, complementarian church in practice. However, we have a good handful of paedo-baptists. I'm what would be a labelled a five-point Calvinist, but I would be happy to welcome a Arminian into fellowship and debate. We are covenantal for the most part, yet open to dispensationals at all levels of leadership. We major on the essentials.
Can this be done? We're doing it now.