Just so you know where I'm coming from I should explain my own position on works. I'm a Classical Arminian who embraces penal substitutionary atonement and the Trinity, and denies all forms of eternal security, believing in non-meritorious requirements to be saved. I appreciate the emphasis on the importance of holy living, but find that legalism actually hides sin and does not produce any real holiness.
Please define "legalism". If it is legals for God to give His law and for Jesus to set a sinless example for us to follow of how to obey it, then legalism is a good thing, but I don't think that that is what legalism refers to. God's law was never given as a means of producing holiness even through perfect obedience, but rather it is God who makes us holy and obedience to His law is what that looks like.
But this is as far as I can go. I cannot agree the Scripture promotes the following:
1. Self-effort and self-goodness are the way to righteous living.
2. We are under the demands and obligations of the Law, which are clearly said to be perfection.
3. We will be judged for sins we are repentant of, including current struggles.
4. We have to fulfill a certain percentage of perfect character for righteous living.
5. We can live sinlessly perfect.
6. Our good works merit and earn for us a place in heaven.
Self-effort does not involve relying on anyone else, so it is incorrect to consider relying on what God has instructed to be self-effort. To deny that we are under the demand and obligations of God's law is to deny that God is sovereign. God's law came with instructions for what to do when the people sinned, so it never required perfection. I also cannot agree with 3-6.
If we go back to attempting to live righteously by our own efforts and under the perfection the Law demands, or if we mix grace up with works, claiming grace is just to put us back under the Law with a little helpful boost where we restart over and over to try to reach as much perfection as we can muster, while continually condemned to always falling short to just get "cleaned up" so we can try, try, again, like the little engine that could—the Law will produce sinful things in us, it will arouse our sin nature to lusting, it will encourage our pride in our own self-righteousness, it will secretly give us a sense of achievement even while paying lip service to grace, it will put us under demonic powers because we are attempting to earn God's favor, it will produce condemnation, shame and a constant sense of falling short, it will produce fleshly striving and a performance mentality where we are always under a sense of demand and pressure to produce more righteous living and try to atone or make up for past failures, all while minimizing the "little" sins we have that we can’t help, implying they don't count for much and are not really “hell worthy,” and inflating our sense of self-holiness, and on top of all this, it will encourage feeling superior and looking down on those who seem more sinful.
In Matthew 23:23, Jesus said that faith is one of the weightier matters of the law, so it was never given as something that we can obey on our own apart from faith in God. The fact that we can repent after we have sinned demonstrates that the law does not demand perfection. In Deuteronomy 30:11-20, it says that God's law is not too difficult to obey and that obedience brings life and a blessing while disobedience brings death and a curse, so choose life! So it was presented as a possibility and as a choice, not as the need for perfection.
There are many verses that show that God is gracious to us by teaching us to do works, such as Psalms 119:29-30, Exodus 33:13, Genesis 6:8-9, Romans 1:5, and Titus 2:11-14, so the problem is with people trying to separate graciousness from righteousness as if they were not compatible character traits of the same God that He expressed throughout both the OT and the NT. Obedience to God's law has nothing to do with trying to earn God's favor, having a good enough performance, producing condemnation, producing righteousness, minimizing sin, inflating our sense of self-holiness, or encouraging us to feel superior to others. If God's law were His instructions for how to inflating our self-holiness and God does not want us to do that, then it would follow that God therefore doesn't want to be obeyed, which is absurd, especially when all through out the Bible, God wanted His people to repent and to return to obedience to His law.
A law that is holy, righteous, and good does not also produce sinful things in us, but rather you are again confusing what Paul said about the law of sin with the Law of God.
And all of this—all of this—instead of simply resting in the Work of the Cross, proclaiming its finality, and watching the Holy Spirit work miraculous grace inside of us with no burden of self-improvement or threat of judgment for falling short. The automatic rejoinder is always "But that means we can sin all we want!" yet what we need is an inner change, not forced actions. Freed from law, no longer do we spiritually navel-gaze at how good or bad we are performing, but come to a complete place of reliance and dependence and peace in the knowledge that God will do it all in us, constantly being covered in mercy, no matter how weak we feel or badly we perform. Be aware that the focus and preaching of "Lordship Salvation" and righteous striving, produces secret spiritual pride and places one under the Ministry of Death and Condemnation the Law was always meant to be. One cannot promote verses that say “keep the law” or “keep the commands” and just explain away and ignore verses that clearly and directly say we are not under the law, we are dead to the law.
In Titus 2:14, Jesus gave himself to redeem us from all lawlessness and to purify for himself a people of his own possession who are zealous for doing good works, so becoming zealous for doing good works in obedience to God's law is the way to rest in the Work of the Cross. Likewise, obedience to God's law is the way that the Holy Spirit works miraculous grace inside of us with no burden of self-improvement or thread of judgement for falling short (Ezekiel 36:25-27). Obedience to God's law is what inner change looks like. Obedience to God's law has nothing to do with spiritually navel-gazing at how good or bad we are performing. Obedience to God's law is the way to come to a complete reliance and dependence and peace in the knowledge that God will do it al in us, constantly being covered in mercy, no matter of weak we feel or badly we perform. God's law is not His instructions for how to produce secret spiritual pride. According to Deuteronomy 30:15-20, obedience to God is a ministry of life and blessing, while it is disobedience that is a ministry of death and condemnation. While we are not under and dead to the law of sin, we are still under and alive to the Law of God.
Sneaking legalism back into Christian living is very tempting because it appeals to our self effort and our prideful desire to earn things and feel good about ourselves. Yes, the Law is necessary for the Gospel, yes, the Law does not ever die in and of itself, but the true Gospel is that we died to the Law and all of its demands because the Law was perfectly fulfilled on the Cross. Wanting to contribute to that Work of the Cross with our own efforts and goodness is the perennial temptation of the sin of self-righteousness. Whatever God requires of us in the matter of holy living, cannot be based on the demands of the Law that only grace could fulfill for us. These are non-meritorious requirements fulfilled by grace itself in us, not as an expression of fulfillment or requirements of the Law that only the Cross could fulfill for us, but as the non-meriting demands of a gracious Savior whose yoke is easy and whose burden is light, and who asks nothing of us that he himself is not willing to fulfill through us and in us, just the bare acceptance of the free gift of grace.
I've said nothing to support sneaking legalism back into Christian living or to appeal to self effort or prideful desire to earn things to feel good about ourselves. In Matthew 4:15-23, Jesus began his ministry with the Gospel message to repent for the Kingdom of God is at hand, which was a light to the Gentiles, and God's law is how his audience knew what sin is (Romans 3:20), so repenting from our disobedience to it is a central part of the true Gospel message.
In Matthew 5:17-19, Jesus said that he came to fulfill the law in contrast with saying that he came not to abolish it, so you shouldn't interpret fulfilling the law as meaning essentially the same thing as abolishing it. Moreover, Jesus did not say anything about his death on the cross anywhere in Matthew 5, but rather he proceeded to fulfill the law six times throughout the rest of the chapter by teaching how to correctly obey it. In Titus 2:14, Jesus gave himself to redeem us from all lawlessness and to purify for himself a people of his own possession who are zealous for doing good works, so becoming zealous for doing good works in obedience to God's law has nothing to do with wanting to contribute to the Work of the Cross with our own efforts and goodness or with the sin of self-righteousness, but rather that is the way to believe in the Work of the Cross (Acts 21:20). In 1 Peter 1:16, we are told to be holy for God is holy, which is a quote from where God was graciously giving laws for how to do that. Obedience to God's law is the free gift of grace.
Yes, we know this will produce some kind of change in us and we cannot outright reject that grace, but sneaking the Law back in is a subtle and nuanced attack on grace itself as addressed in Paul's letter to the Galatians, and removes the power, freedom and confidence of walking without any demands from God that only Christ could ever fulfill for us and in us. Through the Law I died to the Law. By the works of the Law shall no flesh be justified. The Law manifests sin. If a Law could give life, the promise would indeed come through the Law. The Law brings wrath. The Law is your tombstone, the warrant for your arrest, the diagnose of your incurable disease, the sure death knell of all your own goodness and efforts, the Law is sent to kill you, show you that you are not good enough, and display your bondage to Satan, and that is its spiritual purpose. The Law is merely a symbolic shadow of the good things to come. Cling to the Cross alone as the only adequate and full fulfillment of all the Law's requirements, and every other requirement the Lord asks of us must always and only be met by his grace alone, it will happen freely and automatically as a gift when we quit striving in the flesh and learn to rest in our gradually improving imperfections.
Scripture gives us some sins that will either temporarily lose salvation or be unpardonable, even with the atonement not being based in merit. Blaspheming the Spirit, refusing to forgive a person, refusing to trust in the atonement for righteousness, denying faith in Christ before men, deliberately pursuing pride, rebellion and the occult. These sins do not lose salvation because we are on a merit-based system and Jesus' atonement is insufficient, but because Christ has the authority to set non-meritorious requirements. Murder and certain higher sins would lose salvation but can be restored with repentance, as King David clearly says salvation was restored to him in Psalm 51. But murder is not "the greatest sin," that is a man-centered valuation. And causing a person to go to hell through false doctrine would be spiritual murder, far more serious than physical murder. But all sins against God (even so-called "tiny" ones, like not loving God perfectly) are all more serious because God is the center and source of all valuation, not his creation, and that is why they require a correspondingly great punishment for devaluing God.
Under this system of grace, one actually more upholds the seriousness and evil of sin, and produces more real emphasis on loving the Law of God as a gift of grace instead of effort. The reason is, not that suddenly sins become permissible, but that instead of trying to conform outwardly to a standard, we are instead changed inwardly. We become holy accidentally more than we ever did on purpose, and boy how that offends our pride in achieving something, but shows a real instead of superficial love for holiness.
Do you trust that God's law was given as a gift for our own good in order to bless us? Or do you think that God does not know how to give good gifts to His children?