I read Schaeffer’s book when it first came out. It was clear then, as it is now, that it is ideology, not scholarship. In fairness to him, it was published two years after "The Death of God." This was also a period when Bultmann's theology (and his conclusions about what little we could know about Jesus) was influential. You can make a case that Bultmann actually fit Schaeffer's description of liberal theology. I can see how someone could get the impression that liberal theology was self-destructing, particularly if the person was hostile to the use of critical thought in the first place. Seeing Barth as the source of its problems, though, is hard to understand even at the time Schaeffer wrote. And it turns out it didn't actually self-destruct. Liberal theology is doing just fine, though the mainline churches aren't.
But if you looked at things from a broader perspective, critical scholarship had been applied to the Bible since at least the Reformation. Indeed the Reformation depended upon an early form of it. The idea that the Bible is a witness to God’s acts of revelations rather than revelation itself was around well before Barth. I have no idea why it would be considered either negative or despair.
Barth sold the movement he was part of as a rejection of liberal theology. He felt that liberal theology had been too weak to stand up to Hitler. His attack was in some ways similar to Schaeffer’s. He believed that liberal theology was too vague, so he tried to place it on a rational groundwork. He saw it in the “otherness” of God, and thus our dependence upon Christ as his revelation. It’s true that some of his early work was considered existentialist in flavor. That wasn’t his intent, and in most of his work he tried to make that clear.
I can’t judge German liberal theology in the 1930’s, but I think many people now realize that Barth's attack on liberal theology in general was unfair. Or at least that it didn’t apply to much of liberal theology. In the US, for example, liberal theology was more willing to stand up to powerful interests than traditional theology. That continues to this day. Perhaps our version of liberal theology was different from pre-War Germany’s. But I think of people like Rauschenbusch in the US and the whole historical Jesus effort.
The influence of Barth was strong enough that when I was in college liberals such as Rauschenbusch weren’t considered worth looking at. But in the last few decades the mainline churches have recovered our understanding of just how much we depend upon Schliermacher and the whole liberal tradition.