Check and balance.
Char said something yesterday that I thought was a very good point. She said that Protestantism is a means of keeping Catholicism in check, and vice versa.
If Martin Luther didn’t kick-start the Protestant Reformation, then the Counter-reformation would never have happened, and the upper echelons of the Church would probably be just as messed up today. We have Protestantism to thank for the way the Church is today.
Both institutions do regulate each other, in a sense. And I think that that's good for both the Protestant and Catholic churches. I don't really have an opinion on the little break-away churches though.
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