I found your discussion regarding literacy bias to be jaw-dropping. Maybe I am just a biased, blinkered individual, but to argue that one should not find literacy to be objectively better than illiteracy strikes me as really, really silly. I am not saying that everything about the Greeks, the Romans, or modern culture is fantastic and the epitome of human development, but reading and writing and recording are clear, obvious positives, no?
And the answer is, it depends:
First, I think we're a ways off from proving that textual literacy rates were higher at all points in Classical Antiquity than in all points in the Middle Ages, so let's not assume that.
Second, widespread literacy is a great thing. It allows a society to record its innovations in a way that preserves as well as transmits. It allows for greater and more frequent improvements on previous ideas. It allows for more general societal understanding of disparate topics. I'm not ever going to say that increased literacy isn't a good thing.
And of course today textual literacy is important, very important, to someone's livelihood in what we typically refer to as "western democracies" (let's just ignore the potential offenses a term like that might cause and move on). Because the literacy rate is so high, if you're not able to read and write, you're at a serious disadvantage.
In Anglo-Saxon England, the same was not the case. Reading and writing of text were only necessary for people in certain occupations, and in those occupations it was of course widespread. If I'm not mistaken the translation of the first books of the Bible into Old English was the first instance of its translation into a vernacular since the general incorporation of the Christian church, so they were doing pretty well, all things considered.
Anyway, the reason I keep saying "textual" literacy, versus other kinds, is because there are other kinds of literacy. We're very good, today, at reading text. But we're also increasingly good at reading visual imagery in a culturally specific way. Internet memes are a fantastic example, but movies and TV are also very good: we understand them, we can draw meaning from them, because we know what to look for. We're familiar with conventions that allow us to interpret them in the way intended by their creators.
Reading can be viewed in many ways, but when we're talking about literacy, we're primarily talking about one half of a two-part process of communication. Person one transmits information and person two receives it. If you as the "reader" don't know the conventions, then the information transmitted is going to come out garbled at best.
Take the Ruthwell or Bewcastle crosses, for instance. We can really only guess at their iconography, because that's information that's been to a great extent lost over the years. We can deduce it to a degree; but, because these are public works, one can only assume that they were meant for some form of public consumption, and that at the time these were made, the general public would have had the literacy skills necessary to read it.
In addition, the Anglo-Saxons had a thriving oral culture, in which stories, legends, poetry, were all passed from person to person, remembered and adapted and created without ever being written down.
Basically, in addition to textual literacy, the people of the Middle Ages were also possessed of a nuanced and complex visual literacy that rivals our own, and a unique and creative oral culture the likes of which the English language hasn't seen in hundreds of years.
To assume that any culture is inferior to our own merely because it is different is dangerous, even when it concerns something so seemingly obvious as literacy. Even though textual literacy is advantageous in many ways, it isn't the only way for a culture to operate, and isn't by any necessity superior.
Hope that clears up things a little bit? :)