I initially assumed the graph to be per capita.
I did too. Lol.
One problem Iceland have is that Christianity is in quite significant decline in membership by % (per capita) in just 30 years. While the % of non-religious and other religious groups is increasing.
This is happening every where though.
I myself am religious and adhere to Biblical teachings, but I agree with you that Christianity and most other religions have been corrupted and it has pushed individuals away.
I find it interesting, not to get into great debates over doctrines, but Christmas for example, will be mentioned in Hollywood as the former Saturnalia festival. The characters are usually atheist or Jews, but it interesting to me because a Biblical purist, I agree with these statements made on a worldly show.
Some denominations, from my limited experience, also seem to push a lot of hellfire and punishment while negating mercy, and I have seen that type of fierce attitude turn people away from Christ as well. People who despise Christianity that I've dealt with usually make remarks about how terrible the God of Israel is and that they're going to burn forever for some minor (as they perceive it) indiscretion.
I think WW2 turned many Europeans away from God because of the questions "How could a loving God do this" etc.
I'm just thinking out loud here and you can correct or comment on my train-of-thought if you like, I'm not saying that anything I'm about to say is an accurate representation. I'm just trying to make sense of a few things with my limited knowledge:
Although American Christianity is declining, I do find it interesting that (at least in my corner of the USA) people still believe in God even if they are getting lackadaisical. I wonder if there is a psychological/cultural aspect in America that because we were founded on Freedom of Religion we tend to rebel against institutions we find at fault. We're a free people and no man nor church will control my relationship with God. (Which is why Americans for a long time have been stereotypical are against the Catholic Church besides the fact Puritans believed they were the harlot of Babylon, but that's not my argument or point)
We've never had the Catholic Church ruling over us like in Europe where at one point everyone was Catholic and if you weren't then you were ostracized. We're not like England that has the Anglican Church over our country. When people get miffed with ministers they just stop going to church, they don't stop believing in God.
Seems in Europe the church often controlled people's lives and the idea of going independent perhaps wasn't an option, and so when they gave up church they gave up God. I'm not European nor a history/theology major so feel free to tear that assumption to pieces and offer me proper insight or your own opinion.