Protestants tend to be very suspicious of any talk of tradition as playing a role in theology as it would seem to stand somewhat in tension with the Reformation’s view of scripture alone as the authoritative basis for theological reflection.
In fact, the Reformation itself represented a struggle over two types of tradition, that which scholars call T1, tradition based upon scripture as the sole source of revelation (the position of Protestants such as Luther and Calvin, and of some pre-Tridentine Catholics) and that which they term T2, tradition based upon two sources, namely, scripture and an oral tradition mediated through the teaching magisterium of the Church. This latter was arguably the position codified at the Council of Trent, although it would seem that the boundary between T1 and T2 is in practice often blurred, and very difficult to define in any formal or precise sense; nevertheless, as a heuristic device the distinction is useful and it is really only as Protestants come to understand exactly what the Catholic view of tradition is (i.e., T1 plus T2) that they can come to properly understand how tradition (T1) does not subvert the notion of scripture alone.
A moment’s reflection on Protestant practice should demonstrate the truth of this. Every time a Protestant minister takes a commentary off his shelf to help with sermon preparation, or opens a volume of systematic theology, or attends a lecture on a theological topic, he practically acknowledges the importance of T1, whether he cares to admit it or no. A belief in scripture as a unique and all-sufficient cognitive foundation for theology does not, indeed, cannot, preclude the use of extra-biblical and thus traditional sources for help.
Protestantism and Catholicism both value tradition; the difference lies in the source and authority of this tradition: Protestant tradition is justified by, and is ultimately only binding insofar as it represents a synthesis of the teaching of the one normative source of revelation, holy scripture.
Catholicism is more flexible. Though, as noted above, the boundary where T1 ends and T2 begins is not an easy one to formalize or define, Catholicism has proved far more open to the development of dogmas not immediately justifiable on the basis of scripture; and has also been willing to take more seriously ancient practice as a significant guide. Thus, the practice of praying to saints has no apparent scriptural warrant, but was something evident very early on in the post-apostolic era, a point used by Catholics to argue for its validity (a good example of a T2 dogma).
The difference on tradition, of course, connects to other differences on authority. Undergirding Protestant notions of scripture is a belief in the basic perspicuity of the Christian message. This lay at the heart of Luther’s dispute with Erasmus. Erasmus saw scripture as complicated and obscure and thus as requiring the teaching magisterium of the church to give definitive explanations of what it teaches; Luther saw the basic message as clear and accessible to all who had eyes to see and ears to hear. The basic Erasmus-Luther dispute epitomizes the Catholic-Protestant divide on this issue and also reminds us of why the papacy and the teaching magisterium of the church are so crucial in Catholicism. The problem of the Anglican, John Henry Newman, as he wrote his masterpiece on the development of doctrine, was not that doctrine developed, but how Protestantism could discern which developments were legitimate and which were not. By the time the work was published, Newman was a Catholic, having become convinced that the authority of Rome, not the scriptural perspicuity of Wittenberg, was the only means to resolve the problem.