Maybe you missunderstand where I am coming from. I am not saying we should deliberately sin. We are to obey the word of God. The problem with saying "all my sins are past.." is just not realistic, nor is it supported by God's word. We all have sin to some degree. We will always have more that can be done spiritually speaking, and we often stumble as we move toward it. But it is communion with God that brings change.
You are not wrong with what you say, but the problem that I am trying to address is that it is incorrect doctrine to say a person is not saved purely by grace. They are. But the sloppy christian, who takes grace for granted, will probably fall away from grace with time. So we must fear, and live out our salvation with reverence. But it is still a salvation of grace, not works.
As the bible says "it is by grace so it can be SURE to all seed", grace brings assurance, works, bring fear.
I agree that Romans 3:25 is not saying that all of our sins are past. That false interpretation of that verse is in fact what I am arguing against. For many do pervert it just as you said.
When it comes to issues like whether or not a person is or is not saved purely by grace alone, we get into ridiculous debating of perspectives which are true from their own angle of view but most of us are unwilling to let go of our own angle of view long enough to really look at it from any other angle of view.
These subject are like diamonds cut with many surfaces each of which add to the over-all sparkle of truth. Turn the diamond one way and we observe certain angles which reveal cut surfaces. Turn the diamond another way and we see that we did not see all the surfaces there was to understand about the subject, for we find other angles reveal different but complimentary surfaces.
I just finished stating this, which applies, in another thread:
"I should add that our missed understandings are the result of tiny little things we have failed to understand, the combination of which causes us to ratify other larger wrong conclusions as though they are valid when they are not. For that reason it takes a good deal of humble work at learning to see even with the help of the holy spirit.
For example, I can show many places in the Scriptures which tell us that men harden their own hearts and cause themselves to be blind. Conversely, I can show you many places which say that God hardened the hearts of a certain man or groups of men. How can both be true? They can both be true, and it takes humility on our part to learn to see how so. But we cannot exercise that humility while insisting it is all one or the other. Would we rather leave the appearance that the Bible contradicts itself untouched and laying there waiting to confuse others or would we rather find out what the answer to that seeming dilemma is? When we do look for the answer we find that the appearance of contradiction is a mere illusion caused of not having all of the details. And then we are positioned to be able to explain it for the benefit of others, a thing God wants us to do.
If we pridefully insist that we know that God says he blinds men, then that is all we are willing to see. Who then is it that is blinding us from seeing that both can be true, that men do harden and blind their own hearts and that God also does harden and blind some men. It is we that blind ourselves to seeing that through our own pride be unwilling to look past what we believe so as to broaden our understanding. It is not God's nor the Bible's fault for all the information is there for us to do so anytime we become willing to do so.
Why not loosen our grip upon having to be so right in ourselves and free ourselves to look beyond what we think we know. We have nothing to lose and much to gain by doing so."
Edit: I should have spoken more about what Romans 3:25 is really telling us. It is telling us that Christ died to give us a clean slate from our having sinned in our past through our ignorance. That clean slate gives us that "good Conscience", which despite all of this hype about grace alone saving us Peter says is what saves us.
1 Peter 3:21 "The like figure whereunto even baptism doth also now save us (not the putting away of the filth of the flesh, but the answer of a good conscience toward God,) by the resurrection of Jesus Christ.."
Interestingly, not one single verse in the Scriptures says that grace saves us and you cannot show one. It does say that faith saves us and it does say that the answer of a good conscience saves us, but nowhere does it say that grace saves us. However, we know that we would not be saved but for God's grace toward us. Grace is God's goodness as stated at Romans 2:4 and Romans 11:22.
Grace is therefore the sum total of God's loving kindness and compassion, his goodness which moves him to help us so that if we cooperate with him we may indeed be saved.