A biblical defense for denominations?

For, in the first place, when you come together as a church, I hear that there are divisions among you. And I believe it in part, for there must be factions among you in order that those who are genuine among you may be recognized. 

(1 Corinthians 11:18-19 ESV)

I think I understand what this verse is talking about.  Within the context, Paul is rebuking the Corinthians for eating and drinking without waiting for their brothers and sisters that "have nothing".  Paul dislikes this enough to say that when they come together and eat it is not the Lord's supper that they are eating.  So then, how does the above verse fit into Paul's argument?

I read something today that got me thinking about it.  It comes from The Institute for Nouthetic Studies blog.  Here is the main snip that got my wheels turning:

... And, even when there’s a better reason, some of that sort of thing can get mixed in and confuse people. But there is one fundamental reason for the problem. Paul explained in 1 Corinthians 11:19:

. . . there must be factions among you so that it may appear who is approved among you.

In that passage, he was dealing with factions within a congregation, but the principle applies to broader factions as well.... He wasn’t commending the Corinthians for their factious spirit—rather he condemned it. But, at the same time, he made it clear that, sometimes, something wrong can be necessary to produce something right.

I started thinking about it.  Big surprise there since I am such a big fan of denominations and I jump at every opportunity to quote a well respected teacher/author/church leader who gives a biblical case in defense of them.  Okay, that was sarcasm, I dislike division in the church with fervent zeal but I highly respect Jay Adams and I take in what he says with a high level of humility.  That is why his post today made me do a double-take.

I don't think Paul was at all saying that "something wrong can be necessary to produce something right".  In fact, if I understand this passage correctly, the very divisions among them reveal the ones who aren't genuine.  In contrast, Dr. Adams seems to imply that Paul gives us a principle that lays the groundwork for denominations thereby making denominations a bad thing with a good reason to exist.  As if Paul meant that the heretics and the sexually immoral and the greedy and the swindlers could go and form their own faction of the body of Christ and the righteous, obedient believers who walk in the Spirit and have correct doctrine can have their own faction of the body of Christ.  That way it would be evident to everyone who the true believers are.

Christ said he did not come to bring peace, but a sword but he was not bringing this sword to sever the limbs from his bride.  Through Christ's death and resurrection, all the ways of the old man are put away.  Division, rivalries, dissension and all the other works of the flesh were crucified with Christ.  Now Jew and Gentile are one body.  There is no place for division in the body of Christ.  The only distinction granted is that which distinguishes between the works of the flesh and the fruit of the spirit.  In this way, factions are necessary, and discipline is to follow with the hope of repentance and reconciliation with the unity of the body as the desired result.

Denominations are not good, not biblical, and I will boldly say that in my opinion dividing into denominations is one of those "acceptable sins" that is an evident work of the flesh.  I'm disappointed to read this from Dr. Adams.  I praise God for discernment.  I welcome any corrections.

Have I completely gone bonkers????  Or am I one of the few voices blessed enough to believe that humpty dumpty can be put back together again?