Not everyone thought he was a heretic; if everyone did, there would be no Protestants today. Also, he didn’t really make up his own teachings; he simply used the Bible as his only source. The only thing he rejected was Sacred Tradition.
As this thread is about Luther’s New Testament let’s look at that.
Luther REJECTED the books of Hebrews, James, Jude, and Apocalypse (Revelation) as being part of the Bible and he put these four at the end of his translation. Being REJECTED as part of the Bible means REMOVED from the Bible. The fact that he kept them physically there stuck at the end of his New Testament translation does not alter that fact.
What did he say about these books?
Hebrews
“It need not surprise anyone to find here bits of wood, hay, and straw.”
Jude
“Although I praise the book, it is an epistle that need not be counted among the chief books.”
James
“I do not hold it to be his writing, and I cannot place it among the capital books.”
Revelation
“There are many things objectionable in this book, to my mind it bears upon it no marks of an apostolic or prophetic character…Everyone may form his own judgement of this book; as for myself, I feel an aversion to it, and to me this is sufficient reason for rejecting it.”
Even the New Testament books Luther did not reject still got bad words from him:
When talking about the Gospels he said “The first three speak of the works of our Lord, rather than his oral teachings; that of St John is the only true Gospel and should undoubtedly be preferred to the others. In like manner the Epistles of St Peter and St Paul are superior to the first three Gospels.”
Now as far as I am aware at all mainstream Protestants accept as part of the Bible exactly the same books as the Catholic Church. This tells you what utter nonsense Luther was spouting and what Luther tried to do to the New Testament has been thoroughly rejected by Protestants.