In light of some recent musings out and about on Lutheran lists, blogs, and fora, about the "badness" or "goodness" of a Lutheran episcopate, it would be helpful to give attention to one of our greatest Lutheran teachers from the 20th century, Dr. Hermann Sasse, who offers up a very necessary, and healthy, reality-check.

Lutheranism is the only great Christian confession which knows of no particular external order as being of the essence of the church. All other confessions know of a definite constitution as being of the church’s essence because it has been commanded by God in the NT and must therefore be present where the true church of Christ is supposed to be. Thus for Roman Catholicism the Roman episcopal constitution, with the papacy at its summit, belongs to the essence of the church. Also the Orthodox churches of the East and the non-Roman Catholic churches of the West—to which, among others, we count the Anglican Church—know of a quite definite, divinely willed order of the church. To this belong the threefold office of bishops, presbyters, and deacons, together with the principle of apostolic succession.

Calvin knew of the order according to which the Lord willed his church
to be governed. This order, the presbyterial and synodical
constitution, which he felt obliged to read out of the NT, is, so far
as the Reformed Church is concerned, instituted by God’s command as
sacra et inviolable (“holy and inviolable”). In this sense the French
Reformed of Old Prussia declared in 1930: “For us Reformed, a
discussion about the correctness and applicability of this church
constitution is . . . just as much out of the question as say a
discussion on the dogma of the Trinity or the doctrine of Holy
Communion or the Sacraments is for other Christians. For us the
question of the constitution is a confessional question.” The other
Protestant churches similarly have their firm principles in the matter
of order, for example, the Congregationalists and the Baptists; but I
do not want to go into details here.

Among all these confessions, the Lutheran Church stands alone. She
recognizes no particular constitution as “a mark of the church.” The
marks of the church consist alone in the preaching of the Gospel and
the administration of the Sacraments according to their institution [AC
VII 1]. Where these two marks of the church are present, there Christ’s
church is present, in whatever outward form she may appear. The
Lutheran Church has thus been able to assume the most diverse of forms.

She has been able to exist as a state and national church in Europe, as
a free church in the United States and other countries, as an
episcopally constituted church with apostolic succession in Sweden,
without succession in other Nordic lands. She has been able to survive
under constitutions presbyterial or consistorial; indeed, she assumed
almost independent churchly forms, and on her mission fields quite new
formations of the church appear to be developing.

Space does not permit establishing this viewpoint of Lutheranism here.
Suffice it to say that Lutheran teaching on the constitution of the
church is not explained by the underdeveloped appreciation of Germans
for definite forms. Certainly, this deficiency in the German character
has shown up not only in our political history but also in that of
German Lutheranism. But with it that axiom of our confessional writings
has nothing to do. Otherwise it would be quite inconceivable for the
Lutheran churches of other countries to have accepted the axiom without
ado and yet to have produced significant ecclesiastical formations.

The Lutheran view of church order results from the Lutheran
understanding of the Gospel. The latter is no sacred law book, but the
glad tidings of the sinner’s justification. And it results from the
view of the church which is not founded by people and by human orders,
but alone by Jesus Christ. God has given his church his Word and his
Sacraments that she remain true church.

But this side of Lutheran teaching on church order, on which there is
complete agreement among the Lutheran churches, is only one side. One
might, if this view were taken in isolation, arrive at the most
incorrect conclusions. This is happening in Germany today. It is
completely wrong to conclude, on the basis of the above, that we can
shape the church as we will, or that we can even leave the regulation
of church order and the outward governance of the church to the state
or other worldly powers. Though we acknowledge that there can be no
church constitution which is the only one that is right, yet we must
emphasize that there are constitutions that are false. There is no
constitution which absolutely guarantees preservation of the pure
doctrine to the church, but there are constitutions which in the long
run must necessarily destroy the pure doctrine. To this type belongs
the old ecclesiastical regime under the temporal sovereign. This made
some sense as long as it was conceived of in terms of the emergency
measures of the Evangelical territorial lord seen as the membrum
praecipuum ecclesiae (“first member of the church”). But this was to
have been only a temporary emergency law, until an ordered church
government was instituted. What developed out of it—and in conflict
with our confessions, particularly AC XXVIII, which teaches the
separation of spiritual and worldly power—was a right of the worldly
authority to the governance of the church. And this right was even
upheld when the territorial lord converted to another church, indeed
even when the state became the guardian of equality for all religions.
Even if the present state be described as a “Christian state” (a
thoroughly inaccurate and theologically impossible expression), yet
thereby no right is granted it with regard to the formation of the
Lutheran Church.
The state has no right, for example, to coerce the Lutheran churches
into a union with Reformed or Union churches and to impose upon them a
church regime which cannot be recognized as Lutheran Church government
in terms of our confession. Today we have to take this axiom seriously:
that church constitution alone is tolerable to the Lutheran Church
which does not contradict what our confession teaches about the church,
about the unity of the church, about her spiritual office and her
ecclesial government. From this perspective we must test both the
constitution of the German Evangelical Church, as well as the many laws
by which the regulations of this constitution have been already in part
invalidated. And to the “Reich” and the church governments the
following questions must be addressed: Is the Church of the Augsburg
Confession, publicly and legally recognized in Germany since the year
1555, to be accorded the right to exist in the motherland of the
Reformation? Is Lutheranism to become merely a theological direction
within German Protestantism? Is the Evangelical Lutheran Church to be
no more tolerated as church in Germany? We are not able to believe that
the government of the German Reich and even a church government of the
Reich would be ready to execute the judgment pronounced against our
church four hundred years ago at Rome: Non licet esse vos! (“You are
not allowed to exist!”)

Source:
Hermann Sasse
The Lutheran Church and the Constitution of the Church
The Lonely Way, Volume 1: p. 143ff