You were taught to believe we are willful sinners underneath a covering of the righteousness of Jesus, but really we, ourselves, haven't changed. This is what Luther taught, as well as Calvinists, the teachings from the Reformation, the church age of Sardis
Revelation 3, the church that has a reputation for being alive, but is dead. And if we do change, it is only by our own power and are taught to put on an act of Christianity. That act in your own power is works of righteousness, but filthy rags. Only those whose acts are through the empowerment of the Holy Spirit actually inside are righteous and become holy.
This is a completely wrong interpretation of both Reformed theology and Luther.
A. Luther and the Reformers never ever taught we are "willful" sinners underneath a covering of the righteousness of Jesus.
"I say that man,
before he is renewed into the new creation of the Spirit's kingdom, does and endeavours nothing to prepare himself for that new creation and kingdom, and when he is re-created does and endeavors nothing towards his perseverance in that kingdom;
but the Spirit alone works both blessings in us, regenerating us, and preserving us when regenerate, without ourselves..." - Luther
The point being that the Spirit makes changes, not us. "Regeneration" is a big topic in the Reformed / Lutheran scheme, and one worth looking into. You've made assumptions that are simply not true. I don't know, perhaps you were taught this by the Charismatic church, which (by the way) has a history of caricaturing anything before it as "religious" and often believes that it alone has stumbled on the truth. I've heard Charismatics teach that only the Charismatics / Pentecostals "discovered the Holy Spirit" again, and only they "have the Spirit". I should know, I have exceptional experience with the Charismatic church as a Bible teacher within the Charismatic church. I also know this is a blatant falsity about church history.
What is being stated by Luther above is we have changed by God's regenerating Spirit, but our change is a complete work of God, not at all our work. We cannot regenerate ourselves, nor can any of our righteousness ever be good enough.
B. You said that it was / is taught that
"if we do change, it is only by our own power and are taught to put on an act of Christianity." This is completely false. Who taught you that? They were wrong and you should have researched it better. I have never read Luther or any Reformer whatsoever ever having taught this, not back then and not today.
This was, in fact, exactly what they were (and still are) fighting against.
C. You say
"That act in your own power is works of righteousness, but filthy rags. Only those whose acts are through the empowerment of the Holy Spirit actually inside are righteous and become holy."
See again Luther's quote above. It agrees with you in principle, but it is the nature of the righteousness under question. Is it an "infused" righteousness, as the Catholics taught? Or an "imputed" righteousness as the Reformers taught? Or an "imparted" righteousness as the Methodists taught? Knowing the history of the charismatic church, I would venture to say you are thinking it's an "imparted" righteousness. Well, I think that it would be far more fruitful to have the discussion there, rather than caricaturing and straw-manning.
As a Charismatic Christian who leans towards Lutheran theology in soteriology, I agree (as would most reformers, I believe) that we are children of God, yet at the same time we really are still sinners because if we weren't we would not longer need God's grace. It's a matter of absolute fact that every Christian does sin, even unwilfully, and is daily in need of God's grace. I know my history, and I know that the Charismatic movement was born out of the holiness movement, but even in the finer details, those who claim "sinless perfection" do not ever really go so far to say that Christians never sin again, except those who are on the fringe or a couple of crazies here at CF who have no idea what they're talking about.
The point is that we are to embrace our weakness so that we can embrace God's power that saves despite our weakness. That's what Paul is getting at in 2 Corinthians 12:8-10. I have no power to save myself, I will probably be weak until the day I die, but where I am weak, He is strong, and His work on the cross is powerful enough to save me despite my weakness. The gospel saves; Jesus is the gospel, and He saves, not me. The Holy Spirit is not given to me to polish up my own righteousness, to "help" me overcome sin. No, he is the sole and only worker of righteousness in and through me. Only faith in Christ energises good works, and these good works have nothing to do with my entry into heaven or my acceptance before God.
The day I realised that I am weak and will always be weak was the day I began to taste the precious sweetness of the gospel, and (ironically) it was the day I found sin having much, much less of a tug in my life. It was the day assurance came, because assurance is not based on how well I'm doing,
"empowered" or not, but that Jesus died on the cross for me, was raised for me, and for you, and for all who would come and put their faith in His powerful and sovereign Name.