Well, just to compare with a Catholic-Protestant dispute, a Catholic would say that the scriptures give testimony to baptismal regeneration, but most Protestants deny this. The Catholic party will say “,search the scriptures,” and, “had ye believed , ye would have believed in baptismal regeneration,” and the Protestant on the other hand will say that the evidence is simply not clear. This is the problem with the Jews in this passage. It is not that the Jews reject the authority of Scripture, nor that they do not have their own interpretation of Scripture in good faith, but that they do not have the correct interpretation of Scripture. They are not deliberately misrepresenting what Scripture says. They are simply mistaken. So the problem is, even if Scripture gives testimony of something, what good does that do if someone fails to recognize it?
This is a problem because few would be bold enough to say that everything they believe about Scripture is the correct interpretation. Since Protestants disagree among themselves about issues that are, in my mind, of vital importance, how can anyone be certain that he is in a position not unlike the Jews in John 5? Since Baptists and Lutherans strongly disagree on the nature of baptism, one of them has to have made a fundamental mistake and this is not without consequence. If Lutherans are wrong and baptism is a mere profession of faith that should be made by converts above the “age of accountability,” then Lutherans are ascribing salvation to the work of baptism, which falls under the anathematizations of Paul in his Letter to the Galatians. If Baptists are wrong and baptism should be administered to infants and Peter was speaking literally he said “baptism now saves you,” then they are condemning helpless infants to hell by denying them baptism, following the error of the Pelagians. Would either group, however, say that they don’t believe the Scriptures? Of course not. They both zealously defend how biblical their views are. But clearly one of them is severely deluded.
Even if you think with certainty that you have arrived at all the correct answers or at least all the important ones, I hope you can see why Isaiah saw this passage as an evidence of his position.