I'm not sure what a formal confession entails but I do believe that people's consciences work differently and many are harder on themselves than others are. For them, even private confession can be distressful, nerve-wracking.
Most Protestant religions don't have confessionals yet I've known many non-Catholics in my life and they are just as good folks as most Catholics, some better. My Dad included.
Just as an aside, how many, unknowingly, have confessed sins to a priest who was later found to have been abusing children? And does the average Catholic commit that despicable sin, or worse? I tend to think not.
The personal holiness or lack thereof is not the important issue in the Sacrament of Reconciliation, because you're not confessing to the priest as a man; he is acting in persona Christi, as Jesus. So whether he's a good guy or a holy saint or a child molester is irrelevant (though you might be surprised to learn how few priests are child-abusers compared to teachers and to Protestant clergy, contrary to what the hate-filled news media would have us believe).