Even in the 1800s the literacy rate in the US was over 50% (the highest in the world), because it was founded by "sola scriptura" Protestants for whom Bible reading was a religious duty.

That's pretty recent. I'd consider it part of the "age of reading". And even then the US was an outlier, as you said.

Within the last 30 years? Last 20? We had a high point, and we're not there any longer – certainly not in my state (Iowa).

Were they though? Or were they only illiterate because literacy was measured in Latin not their native language? We know that historically that did happen, and it is hard to figure out what was done.

Even today, most talking about literacy rates are using a very high level read skills to make things look bad, when most people can read just fine for the normal level things are written in. I'm near illiterate if you only test me on medical papers.

Literacy doesn't mean your ability to speak, it means your ability to read/write. Formal schooling for the masses is a very recent invention.

It isn't hard to learn how to read at a basic level.

Sure, if you have books in your house and parents who are also literate and encouraging of it.

Books are needed to be good, but just writing a simple letter once in a while when you have time is useful and not that hard.

That merely shows that a very basic education is more widespread. One thing that's always struck me, listening to letters read aloud in history shows, is the eloquence and mastery of the language they possessed.

TLDR: fewer people may have been literate, but the ones who were, were damned good writers.