I have discussed the issue of the priesthoods within the LDS Church on occasion on this blog (see this page for a listing of such articles). One common “proof-text” used by Evangelicals to support their understanding of “the priesthood of all believers” is 1 Pet 2:4-10, which reads:
Come to him, a living stone, though rejected by mortals yet chosen and precious in God's sight and like living stones, let yourselves be built into a spiritual house, to be a holy priesthood, to offer spiritual sacrifices acceptable to God through Jesus Christ. For it stands in scripture: "See, I am laying in Zion a stone, a cornerstone chosen and precious; and whoever believes in him will not be put to shame." To you then who believe, he is precious, but for those who do not believe, "The stone that the builders rejected has become the very head of the corner." and "A stone that makes them stumble, and a rock that makes them fall." They stumble because they disobey the word, as they were destined to do. But you are a chosen race, a royal priesthood, a holy nation, God's own people, in order that you may proclaim the mighty acts of him who called you out of darkness into his marvelous light. Once you were not a people, but now you are God's people once you had not received mercy, but now you have received mercy. (NRSV)
Lutheran New Testament scholar, John H. Elliot, in his massive commentary on 1 Peter, offered the following devastating refutation of the thesis that this pericope teaches the concept of the universal priesthood of believers, initially expounded by Martin Luther in his 1520 The Babylonian Captivity of the Church:
(1) As is evident from its structure and content and from the accentuation of the election of both Jesus Christ and the believing community, 1 Pet 2:4-10 is designed as an affirmation of the elect and holy character of the believing community, which, through faith, is one with the elect and holy Christ. Election rather than priesthood is its central focus. The theme of election that extends from the letter’s beginning to its end (1:1; 5:13) receives here its most profound articulation. The passage, in fact, constitutes one of the most elaborate statements on Christian election in the entire NT.
(2) The covenant formula of LXX Exod 19:6, which included the terms basileion and hierateuma, in accord with prior Israelite interpretation of this text was one of several OT texts employed by the Petrine author to explicate the elect and holy character of the covenantal people of God as once affirmed at Sinai and now affirmed of God’s people at the end time.
(3) The term hierateuma, like the other honorific epithets for Israel with which it is joined here (“elect stock,” “holy people,” “people of God”), is a collective noun designating the believing community as community, as is true of other collective terms as well. The substantive basileion, “royal residence” (v 9b), likewise is applied to the believing community in its entirety and it interpreted as the “house(hold) of the Spirit” (v 5d)
(4) In both 1 Peter and its source, Exod 19:6, “priestly community” expresses the holiness of the covenant community and the immediacy of its relation to God, both of which are distinctive qualities of the believing community that the author stresses throughout the first major section of the letter with other language as well (1:2, 3-5, 14,16, 17-21, 22; 2:5 [“holy priestly community”], 9-10; c. also 3:5, 18c; 5:7a, 10). The action of the believers as priestly community is to offer “spiritual sacrifices acceptable to God” (2:5f), a cultic image that occurs only here in 1 Peter and that is not elaborated on anywhere else in the letter. Similarly, neither hierateuma plays no independent role in the ecclesial thought of the letter. The appearance of hierateuma in 2:5 and 9 is due solely to its place in the covenant formula of Exod 19:6, which is used by the Petrine author to affirm the election and holiness of the household of faith.
(5) No mention is made in 2:4-10 of baptism or any baptismal “ordination” or “consecration” to priesthood on the part of the believers.
(6) Nowhere in 1 Peter is there any reference to the priesthood of Christ or any suggestion that believers share in the priesthood of Christ by virtue of their constituting a “priestly community.” In the book of Hebrews, on the other hand, Jesus Christ is identified metaphorically as a priest (Heb 7:15, 21,; 8:4; 10:21) or high priest (Heb 2:17; 3:1; 4:14-15; 5:5, 10; 6:20; 7:26; 8:1; 9:11). In Revelation, Christians are denoted metaphorically as priests as well (Rev 1:6; 5:10; 20:6). In other NT writings, cultic metaphors occasionally are used to describe the proclamation of the gospel (Rom 15:16), the gift of material support (Phil 4:18), or aspects of salvation (Heb 4:16; 8:1; 9:11-14, 23-28; 10:10, 19-22; 13:10-16). No single NT author, however, makes any attempt to integrate these random images into a unified teaching on Christian priesthood, and this certainly includes the author of 1 Peter. To attributes these various motifs to 1 Peter is to impute alien notions to this text and to distort its focus. In 1 Pet 2:4-10, the association of believers with Christ is that of “living stones,” who through faith are one with Christ, the “living stone,” and who are “elect” as he was “elect” in God’s sight. (John H. Elliot, 1 Peter [Anchor Bible 37b; Garden City: Doubleday, 2000], 451-53).
As with the doctrine of sola scriptura, the Protestant conception of “the priesthood of all believers” is without exegetical warrant. Protestantism truly is the emperor with no (theological) clothing. I would urge Evangelicals to reconsider both their claims and the truth claims of The Church of Jesus Christ of Latter-day Saints.