I regard there to be two fundamental problems, theologically, in these sorts of discussions.
On the one hand a soteriological system that proposes that we must contribute our own power and must sustain ourselves to the rigorous demands of Divine Law in order to ensure we remain in God's good graces is a legalism that can either bring pride or despair. For if we imagine we are achieving this then it is far too easy to imagine ourselves the moral superior over others, failing to recognize our shortcomings, and if failing to notice the logs in our own eyes become the very hypocrites Christ Himself railed against in the Gospels. On the other hand, upon realizing our own shortcomings despair comes like a flood, and we come to resent ourselves and God, becoming angry that He, being Righteous Judge, holds us to an impossible standard that we can never live up to and, damning us as sinners in both this life and the next.
On the other hand a soteriological system that proposes that we have performed the right actions--a choice, a prayer, whatever-have-you--and therefore are now Saved™ and therefore are free to do whatever it is we like this too brings pride. For it reduces salvation to an easy ticket to heavenly bliss, we see ourselves as untouchable. I once heard a man put it in language saying that it is a contract which God is unable to go against, should we become the worst kind of person who in word and deed hates God, hates Christ and hates His creation is untouchable, eternally secure, and is therefore without humility or reverent fear.
Both are wholly unacceptable. Rather, we recognize our own failings and hope for grace, trusting in God's promises that there is forgiveness of sin. Repentance is a lifestyle pursued because of our faith and love of Christ. We do not become confident in our own ability, or in our own choices, but are confident in a God who loves us. Wherever there is sin, there is grace all the more to save us, deliver us, forgive us, and bring healing. We are bold sinners, and because of this our faith in Christ should be all the more bold. We fling ourselves headlong in radical trust that there is a God who loves us, who in Christ there is forgiveness. We recognize that we will fail at what we ought to do, but we do not despair because God loves sinners, God saves sinners. It is the sick who need a doctor, and our physician is Christ who mends our sickness with the soothing balm of His Gospel.
Our security is not because "we got saved", it's in Christ who is saving us.
Faith isn't mental assent. Faith is a bold trust in Jesus. Faith does not ask if good works should be done, it just does them. If we imagine ourselves morally superior or untouchable then we do not have faith, we have a cheap substitute, what Dietrich Bonhoeffer calls Cheap Grace.
"Cheap grace is the preaching of forgiveness without requiring repentance, baptism without church discipline. Communion without confession. Cheap grace is grace without discipleship, grace without the cross, grace without Jesus Christ."
In contrast to Costly Grace:
"Costly grace confronts us as a gracious call to follow Jesus, it comes as a word of forgiveness to the broken spirit and the contrite heart. It is costly because it compels a man to submit to the yoke of Christ and follow him; it is grace because Jesus says: 'My yoke is easy and my burden is light.'"
Bonhoeffer also writes, "When Christ calls a man, He bids him, 'Come and die.'"
We administer the Law to the arrogant and the proud, reminding them that they are grave sinners, no better than anyone else and that we have all screwed up and act like screw ups.
We administer the Gospel to the fallen sinner, the screw up, proclaiming the unyielding grace and compassion and kindness which God has for each of us. That there needs be no despair, there is hope. That we are each and every one of us valuable and valued by God as His beloved. There is no one on this planet that is not the beloved of God.
The Law keeps us humble. It says, "You are indeed a great sinner."
The Gospel keeps us hopeful. It says, "You are created and loved by God, it matters not what you've done, there is a place for you in God's kingdom and family."
-CryptoLutheran
