Pastor Weedon, a well-known Lutheran blogger, has a post worth reading: "Correcting a Misperception":
Some former Lutherans persist in slandering our faith by saying that it is spiritually damaging - pointing especially to the teaching that we are simultaneously just and sinner. Thus, to their way of thinking, Lutherans teach that one may intentionally and willfully persist in sin and rejoice in forgiveness. But this is a complete falsification of our teaching.
Lutherans state unequivocally:
Nor indeed is this faith idle knowledge, nor can it coexist with mortal sin. Ap. IV.115
For through one's entire life, repentance contends with the sin remaining in the flesh. Paul testifies that he wars with the law in his members, not by his own powers, but by the gift of the Holy Spirit that follows the forgiveness of sins. This gift daily cleanses and sweeps out the remaining sins and works to make a person truly pure and holy...The Holy Spirit does not permit sin to have dominion, to gain the upper hand so that it is carried out, but represses and restrains it from doing what it wants. If sin does what it wants, the Holy Spirit and faith are not present. SA III, 3, 40, 44.
The person who dares to say "God loves to forgive; I love to sin; what a deal!" is no Lutheran and no Christian.
What simul justus et peccator is rather seeking to confess is that to be a Christian is to be in a life-long struggle against the flesh and its lusts. You will never advance to a point where the struggle is ended. It goes on to the very end. The fact of the struggle doesn't mean one isn't a Christian (the absence of the struggle does!). As St. Paul wrote of himself to the Romans: "I know that nothing good dwells in me, that is, in my flesh, for I have the desire to do what it right, but not the ability to carry it out." (7:18)
Such is the sad experience of every Christian: we can and do make progress in following our Savior, and yet we find that there is inside of us a wretched fountain of corruption that continues to pollute us. It drives us to the joy of grace. The joy of simul justus et peccator is that we are not condemned before God for this fountain of corruption in our flesh; we fight it with every weapon of the Spirit and resist it to the grave, and we rejoice that it will finally be extinguished and removed from us on the day of our death, when our Baptism into Christ is completed, and we put off this body of death. When we are resurrected, this fountain of corruption will not be resurrected within us. And for that all glory to God!
To confess simul justus et peccator is thus the exact opposite of saying "don't worry; do what you want; you're forgiven." It's rather saying: "Since you are forgiven, you have the Spirit to fight tooth and nail to the bitter end against this sin which inheres in your flesh and to be assured as you battle that you will win the final victory if only you remain under the forgiving blood of the Lamb of God."
Such a teaching is anything but spiritually damaging; it is in fact the only comfort and source of peace you can find when confronted with the ongoing wretched flood of filth from the flesh. "There is therefore now no condemnation for those who are in Christ Jesus."
(read the original post and comments at "Weedon's Blog": http://weedon.blogspot.com/2009/07/correcting-misperception.html )