'Teaching to the test' has not caused the drop in literacy. Rather, it's teaching reading using bizarre methods, like whole word recognition instead of phonics. This has nothing to do with 'teaching to the test', since phonics would teach more to the test than whole word anything. A phonetically competent adult would be able to make out almost any English word. A whole word one would not.
Is there a way to teach reading, which increases reading test scores, that is bad? I’m having a hard time imagining what that would look like. Just because someone comes up with a pithy saying that some people call a “law” doesn’t make it a universal truth.