You only posted part of Luthers view:
Here's the fuller view:
If you are a preacher of grace, then preach a true and not a fictitious grace; if grace is true, you must bear a true and not a fictitious sin. God does not save people who are only fictitious sinners.
Be a sinner and sin boldly, but believe and rejoice in Christ even more boldly, for he is victorious over sin, death, and the world. As long as we are here [in this world] we have to sin. This life is not the dwelling place of righteousness, but, as Peter says, we look for new heavens and a new earth in which righteousness dwells. It is enough that by the riches of God’s glory we have come to know the Lamb that takes away the sin of the world.
No sin will separate us from the Lamb, even though we commit fornication and murder a thousand times a day. Do you think that the purchase price that was paid for the redemption of our sins by so great a Lamb is too small? Pray boldly—you too are a mighty sinner [LW 48:281-282].
Luther was prone to strong hyperbole. It's his style, and this statement is a perfect example. The first thing to recognize is that the sentence is a statement of comparison. Luther's point is not to go out and commit multiple amounts of gleeful sin everyday, but rather to believe and rejoice in Christ even more boldly despite the sin in our lives. Christians have a real savior. No amount of sin is too much to be atoned for by a perfect savior whose righteousness is imputed to the sinner who reaches out in faith.
Without true repentance, we cannot have faith in God. And without faith, we cannot come to full repentance.
faith and repentance ... The two go together, each strengthening the other. Without faith, we cannot repent in the true sense. Faith gives us a reason to repent. Conversely, faith cannot reach full strength unless we repent — to let go of ourselves and our own shortcomings.
From that time Jesus began to preach, saying, “Repent, for the kingdom of heaven is at hand.” (Matthew 4:17)
I have not come to call the righteous but sinners to repentance. (Luke 5:32)
Unless you repent, you will all likewise perish. (Luke 13:3, 5)
Acts 20:21
21 I have declared to both Jews and Greeks that they must turn to God in repentance and have faith in our Lord Jesus.
Repent, then, and turn to God, so that he will forgive your sins.
(Acts 3:19)
Ezekiel 18
30Therefore, O house of Israel, I will judge you, each according to his ways, declares the Lord GOD. Repent and turn from all your transgressions, so that your iniquity will not become your downfall.
31Cast away from yourselves all the transgressions you have committed, and fashion for yourselves a new heart and a new spirit.
32For I take no pleasure in anyone’s death, declares the Lord GOD. So repent and live!