When I use the word "Reformed" in this question, I'm referring to salvation, not the church.
So, the question again is, "Can Reformed Theology be a Distraction?"
I'm sad to say that the answer is, "Yes." That does not mean that it is a distraction. Rather, it can be.
Reformed theology is a distraction when people spend so much time talking about things like election, monergism, predestination, supralapsarianism, etc., that they forget to feed the hungry and share the gospel. This does happen with some people. I have seen folks who are so concerned with having every detail of their doctrine correct that they ignore living out their faith. When this is the case, they actually don't have their doctrine correct because living out our faith for the good of others is correct doctrine.
This is a danger on seminary campuses, but it can infect churches as well. When head knowledge doesn't lead to action, there is a significant problem.
Reformed theology ought to have a positive impact on the way we live in the world. It should be that we are so stunned by the manifold grace of God that we want to share Him with everyone we know. We should be so overwhelmed by our completely undeserved predestination that we joyfully live out the commands of Christ to love the lost by caring for their needs and teaching them about Jesus. Let us take our thrill over God's changing our hearts of stone to hearts of flesh and use that to inspire us to holy living.
In the end, Reformed theology, like many others things, can have a positive or a negative impact on our lives as individuals and as the church as a whole. The impact should be extremely positive. Let's act so it will be.