I have often heard Ron Allen discuss how dangerous it is to adopt a cultural rather than a biblical hermeneutic, and I entirely agree.
On the other hand, I also highly value the following statement from Alan Mann.
[T]he gospel narrative should not become a museum piece, and neither should the theology and cultural awareness that we derive from them. We need to read and reread the atonement [among other theological issues – NL] as time and place change the context in which we are called to communicate the salvific work of Christ.
What would one call or how would one express the appropriate balance between those two seeming extremes?[1]
[1] Alan Mann, Atonement for a βSinlessβ Society (Milton Keynes, UK: Paternoster, 2008 reprint) 3
Long-ing For Life 
I would say they are two different things (or at least should be).
The interpretation of the content and meaning must be strictly what the biblical author intended to communicate, and must not be tampered with. (Mistakes should be corrected, but otherwise there is nothing to “update” without changing the message.)
Application of the message and modes of communication may need to be updated based on the cultural context, but that’s not hermeneutics.
My fear is that people use valid reasons for adapting forms of communication as reasons to use a different hermeneutic, thereby coming up with a different interpretation that better suits their interests.
Here is the difficulty, Steve…we often act as if the explanation/understanding of the content and meaning that a previous generation gave is sacrosanct and must not be tampered with. This is wrong; while the original authorial meaning is absolute truth, our understanding/explanation of it is not.
So, for example, some folks take the Scriptural truths on atonement and declare that penal substitutionary atonement theory is the absolute, must be held to truth that Scripture declares. This is not the case, even if I believe much (or even all) of what penal substitution theory says.
It is entirely possible that Martin Luther, for example, gave an exegesis of Romans which propounded a true significance of the text, but was not the absolute meaning. I believe God leads His servants to draw truths from Scripture for a particular time and place, and that we will never exhaust the possible significances of the Text, and perhaps never articulate the exact original authorial meaning. (I’m referencing the work of E.D. Hirsch, Walter Kaiser, Jr. and Moises Silva in contrasting meaning with significance.)
I agree that we should continually ask, “is our interpretation flawed or lacking, perhaps due to cultural filters?”
However, that’s different than seeking to base our interpretation on current cultural relevance, which is what I’m afraid some try to do.
I would also agree that the significance/implication of a text could change over time (this is a form of application), but I think we have to be careful with that. In many cases, the application/implication/significance is timeless and universal, just like the interpretation/meaning.
Perhaps we ought to say that the language used to describe both meaning and significance can safely change in order to be more easily meaningful to the contemporary culture.
I feel safe with that, however, the tough part comes when realizing that a previous generation (or generations) articulated the meaning of an idea, e.g., justification, differently than they ought to have, or only partially explicated its meaning, precisely because they lacked context regarding the original milieu. This necessitates the re-articulating of meaning, which makes many people enormously uncomfortable, but is nevertheless healthy.
From my perspective, the problem comes when people attempt to re-articulate meaning because they have adopted a contemporary cultural hermeneutic. The reassessing of meaning on the basis of a biblical hermeneutic, however, is appropriate, and, indeed, ought to happen every generation or so.
What is going on between John Piper and N.T. Wright right now is an ironic example of a non-traditionalist (relatively speaking of Piper in contrast to Wright) clinging to Reformation tradition articulations rather than acknowledging that Wright is remaining faithful to the Reformation-era truths, but filling out the places where the Reformers (or there descendants) read Reformation-era ideas into the Text, and thus allowing the Text itself to speak to us more fully.