Were they though? Or were they only illiterate because literacy was measured in Latin not their native language? We know that historically that did happen, and it is hard to figure out what was done.
Even today, most talking about literacy rates are using a very high level read skills to make things look bad, when most people can read just fine for the normal level things are written in. I'm near illiterate if you only test me on medical papers.
Literacy doesn't mean your ability to speak, it means your ability to read/write. Formal schooling for the masses is a very recent invention.