What is the metric here? 42% of words? "Somewhat intelligible"? Some formula given parameters like years*7 + km*0.01 + difficulty*3?
Dutch and German are different languages mit an armey un flot on a somewhat fragmented and evolving dialect continuum. Modern Dutch emerged about half a millennium ago, before standard German was created, and long before it was widely spoken, which was really only recently.
Speakers of German dialects can hardly understand each other if they are just listening in without context, even speakers of dialects within the same subgroup like Alemannic. If someone actually speaks real dialect on television there are usually subtitles.
Your anecdote is undoubtedly true and not surprising but a very flawed experiment because 1) you definitely know English, and Dutch is between German and English 2) you presumably know at least passively the stories of the Brothers Grimm, which is anyway a restricted and archaic domain for which you have some priors 3) it's written not spoken.
The important concepts here are Abstandsprache, Ausbausprache and Dachsprache.
Reading en.wikipedia.org/wiki/Abstand_and_ausbau_languages - concepts inspired by this set of languages and dialects - and Ctrl+F-ing for Dutch:
Finally, the ausbau languages may be so different that they also constitute abstand languages. Examples include Dutch versus German,
On the history:
Approximately at the same time, Dutch started to replace Low German as a roof of the Low German dialects in the Netherlands that form today's Dutch Low Saxon group, and most Central German dialects went under the "roof" of the evolving High German. Low German ceased to be spoken on the eastern rim of the Baltic Sea. Today, its dialects surviving in northern Germany have come under the roof of Standard German. Local Low German dialects spoken in the Netherlands have come under the roof of Dutch. This happened despite the effect of notable migration streams in both directions between the Western (Dutch) and Eastern (Prussian, now mainly Polish and Russian) areas of the region of the Low German languages, motivated by both religious intolerance and labour need. In several spots along the Dutch–German border, identical dialects are spoken on both sides, but are deemed to belong to different roofing according to which side of the border they are on.
Since you can read German you should also read the German version of that article. (Since you can read Dutch too I would recommend the Dutch version but there is none.)
Exposure is everything, and in the real world, exposure is unevenly distributed. Knowledge of one does not imply instantly understanding of the other upon exposure. Knowledge of one just implies much faster learning of the other.
Here is my answer to Do Germans understand the Dutch language?:
No, not in practice. By default, German speakers understand only occasional Dutch words, phrases in context, most written signs and the gist of simple texts like Wikipedia articles.
It depends less on the inherent distance of the languages - about the same as to Swiss dialects - and more on other variables: how much Dutch has one been been exposed to (and how much English, Frisian and French), whether the Dutch is written or spoken, what the topic is and situation are, how much background noise there is... And last but not least there are some delicate questions of attitude and intra-European protocols.
Those context variables are why the Dutch are usually much better at German than the Germans at Dutch. Smaller peoples are doomed to be more talented. Some German may report that he communicated with a Dutchmen, but that was only because the Dutchman was desperately re-activing the German he learnt in school, and due to the accent and other mistakes, the German thought that it was Dutch that he was understanding.
If a German villager from Transylvania were trapped on a desert island with a truly monolingual Dutchman - a rare species - they would understand each other within days to weeks, for the purposes of life on the island. After a year or so they would be speaking some sort of Platt or Kölsch, the exact mix would depend on their personalities.
But until then... Dutch is as effective at encrypting communication from German speakers as French is.
Intelligibility is not always symmetric. How easily can Dutch speakers understand German having had no exposure? Well, standard German grammar is more conservative than standard Dutch grammar, in terms of gender and especially case, concepts frequently reported by language learners as physically painful.