Regardless of what one makes of this hyperbolic polemic (and there are a some others that make us blush) designed to accentuate the greatness of God’s grace, a fuller examination of Luther’s teaching shows that he did not teach that since we aren’t saved by works then there is no reason to try to clean up our act, but as shown, he saw the latter as a testimony to no real faith.
In protesting against those who charged him with rejection of the Old Testament moral law, Luther responded,
And truly, I wonder exceedingly, how it came to be imputed to me, that I should reject the Law or ten Commandments, there being extant so many of my own expositions (and those of several sorts) upon the Commandments, which also are daily expounded, and used in our Churches, to say nothing of the Confession and Apology, and other books of ours. Martin Luther, [”A Treatise against Antinomians, written in an Epistolary way”, http://www.truecovenanter.com/truelutheran/luther_against_the_antinomians.html]
As for no longer calling ourselves sinners, this is basically truer, as under the New Cov., the appeal is to see yourself according to what you are positionally in Christ, washed, sanctified and justified, accepted in the Beloved and a new creature seated in the heavenlies. (1Cor. 6:11; Eph. 1:6; 2:6; 1Cor. 5:17) to the gory of God.
But practically we are sinners, and James refers to believers as such, saying, “Do ye think that the scripture saith in vain, The spirit that dwelleth in us lusteth to envy? “ “Draw nigh to God, and he will draw nigh to you. Cleanse your hands, ye sinners; and purify your hearts, ye double minded. “ (James 4:5,8)
And while God sees us a righteous in Christ, He also is pleased when we walk accordingly, and likewise sees us when we are not Christ-like, and can have something against us, and thus He calls us to repentance. (Rv. 2+3)
And thus believers will suffer loss of rewards at the judgment seat of Christ, but which is not purgatory and occurs during the period of the Lord’s return. http://peacebyjesus.tripod.com/1cor._3.html#Purgatory
God night.
I recognize the hyperbole and I also see that others can miss it and take it wrong.