This is nonsense that is perpetrated from not understanding what Luther is saying. Catholics believe that man is not all that bad. Consequently they can "work" themselves into better and better situation through communion, pentence, indulgence, etc. Luther is saying that man is rotten and nothing he does is going to satisfy God. However, although we cannot help but sin we have a redeemer who has taken care of these sins.
Catholics can't understand Luther's comment simply because they don't believe in original sin.
And you are so darn ignorant, it's not even funny! Please check your facts.
Catholics believe that man is wounded and CANNOT ALONE come to God. That does not make him "neutral", first of all. Secondly, the sacraments are not means of "working" ourselves into a better situation. They are God's means of allowing us to grow in love. In a visible manner, God comes to us to ENABLE us to love, since we cannot do it alone. Salvation is not about earning, but about conversion, which can be done only WITH God.
Catholics do not consider Luther's anthropology correct, but a deviance from the Christianity of 1500 years. It is a mistake to say that man can do NOTHING good, even in Christ (which would require a big clean horse-blanket thrown over me to sneak me into heaven!), just as it is a mistake to say that man can do what it takes to be saved ALONE. Luther's mistake was imputing man's righteousness SOLELY to Christ - which is against the Scriptures and Traditions of the Church. Unless OUR righteousness exceeds that of the Pharisees and Scribes (not Jesus' righteousness imputed to us), we shall not enter into the Kingdom. (cf. Mat 5:20). Matt 5-7 clearly states how OUR righteousness can exceed the Pharisees'.
Regards
Others commented on this. I actually agree that given the entire philosophy of utter depravity of man, Luther's comment can be better understood, as Harley explains. But what really is happening is that the fact that Luther could make that comment at all shows the bankruptcy of Luther's theology.
As I googled the "sin boldly" quote, I found several embedded in actual sermons by Lutheran pastors. I dod not see any assertion that the quote was somehow inaccurate or out of context. The reason I chose a Catholic website to give a link to is because there were several corroborating quotes there, all rather shocking to an unbiased reader, and they were all meticulously sourced.