Well I am not going to judge the change in Church practice, whereby we no longer presume formal adherence to heresy by protestants and I will leave the Orthodox alone (for now). But what intrigues me is whether the whole framework in which these things are addressed is hopeless detached from reality.
St. Thomas, in discussing heresy, states:
The name heresy ... implies choice. ...One can deviate from the correct Christian faith in two ways. In one way when he does not will to assent to Christ Himself...in another way by this, that he intends to assent to Christ, certainly, but fails in choosing those things by which he assents to Christ, since he does not choose those things that are truly handed down by Christ, but those which are suggested by his own mind. S. Th. II q. 11 a. 1 co.
In another article (S. Th. II-II q. 5 q. 3) he explains the difference between formal and material heretics much the same way we distinguish between liars and people who are just wrong. If I say X is true, and believe it, but am wrong, then I am not a liar. But if I say X is true, believing it false, then I am a liar. Any individual can be mistaken about some doctrine of the faith. Just ask your average Catholic to explain predestination. But there is a different between being materially wrong and choosing to cling to something based on one's own will, rather than obedience to God.
We live in an age where the word choice, from whence we get the term heresy, is enshrined as something sacred. One's opinions are sacrosanct and no matter your qualifications, or lack thereof, your opinion is of equal worth. It is certainly not an age of obedience.
We can certainly imagine someone born and raised in a protestant tradition, adhering to what was handed down to him, and acting in good faith. But that picture is exceeding rare in reality. I do not speak here of protestantism, but just modern man as such. It holds true from Catholic households just as much. We exalt in making our choice.
Regardless of the presence or absence of other doctrinal errors, I am quite afraid that the disappearance of the term heretic or heresy is not a sign of a lack of the formal element of heresy. It arises more from the fact that modern man has made heresy itself a tenet. The choice and the faculty to choose are celebrated. So regardless of whether you choose truth or falsity, the important thing is that you choose. And this, it seems to me, is a far more pernicious heresy.