Not too shabby my good man! :)
My comment was, and is, that Protestantism tends to deny that the walk of faith requires two legs: faith and works of love.
Now this along with what you write below is truly new, and thank you for it. While of course I cannot speak for all Protestants, I can report that I, my SB church, and every other Protestant church with which I have had contact, all believe that Godly love, and the future works thereof, are absolutely an essential element of true faith. With one type of exception, I know of no one who believes that we can say the sinner's prayer, be saved, and then go off and do whatever we want.
I surely have met many righteous Protestants. I also know some Protestants driven to despair by recurrences of sin flying in the face of their supposed status of being saved by faith, the faith they know in their hearts to be genuine. I know others who develop insensitivity to sin, -- sin boldly, -- and fall off on the other side, presuming their salvation. None of that is healthy.
Indeed that is very unhealthy. Here is where the exception I just mentioned comes in. I believe the people you are describing simply do not know their own faith! I remember that when I was first saved, according to my beliefs, I knew the basics but nothing else. That's why, soon thereafter, I "fell away" during college, although I never felt at liberty to 'sin boldly'. :) I had no clue what it was that I really had. It wasn't until later that I was moved by the Spirit to read and study and accept His gift of a mentor that I understood much better the nature of my own faith.
The people you speak of in despair are much better off. We would say their pain is God disciplining and correcting His beloved children. They SHOULD feel guilty and seek to reckon it and fix whatever the recurring sin is. This is good evidence of a truly regenerated heart. The guilt shows that this person has some knowledge, or leadership by the Spirit, that it is not OK to just go on sinning after accepting Christ. The guilt must be dealt with in a Godly way, and it will happen for someone who is truly saved. This last part is a big point most of these people do not yet understand. I can see the wisdom in God arranging it this way.
The people you mentioned who 'sin boldly' are in much worse shape, but don't necessarily forfeit their salvation, unless the condition is permanent. That would evidence that their original salvation was not genuine, because what God promised would happen, didn't happen. Not likely! :) If I were in your shoes and I had any Protestant friends who sinned boldly, based on their belief of once saved, always saved, I might gently ask about their salvation experience. Did he invite Jesus into his life as LORD? What does that mean to him? Surely he knows that Christ does not want him to be leading this lifestyle, so why would Christ keep His promise to him (salvation), when he has been lying to Christ right from the beginning?
I find little to disagree in your beautiful post. The Catholics believe that hope is an important theological virtue. Both despair and presumption are then theological vices. I do not see how one vice is better than the other. But beyond that, I think we agree on the relative role of faith and work in salvation, even when we use different terminology.