It has to do with the principles used to determine what the bible is. When Moses prepared the Jews for a meeting with God, they said being in his presence was too terrifying and they asked for a spokesman, or in this case Moses. God agreed to use prophets, and he gave the people criteria for recognizing an accredited prophets. Their writings were stored in the temple. People who said they spoke for God, but who could not pass the test God gave, were to be stoned to death. God said the people only had to listen to an accredited prophet.
I've already answered the part on how the truth of the bible is determined. According to the theory of denominationalism, some of the bible is entirely clear, just using the principles of language, logic, historical circumstance, etc. Core doctrine, on which all Protestants agree, is based on what is clear. However, peripheral matters are not as clear and are subject to debate until agreement is reached.
However, I reject absolutely that we can arbitrarily pick someone to set out what is truth because otherwise there could be a lack of institutional unity. It's ridiculous. The truth is authority, not people, which is best represented by the bible, and when the words are not entirely clear on peripheral matters, it is best to go through a process of debate to discern who is correct.
PS -- by the way, Protestants do not advocate stoning those Catholics to death who act as God's spokesman in a way that does not meet the test of an accredited prophet in upholding Holy Tradition. Stoning people to death is not part of the New Covenant under Christ. However, when those people meet Christ in judgment, it does seem there is going to be a problem for them.