To read this passage and apply it faithfully to our lives takes a lot of courage, I think. The gist of it seems to be that it is not possession of the law that matters to God, but the practice of it.
When we take that principle and expand it a bit to include God’s special revelation throughout His Word, the application to us becomes clear: It is not possession of Scripture (or the truths, passages, or doctrines therein) that matters to God), but the practice of it.
Claiming to possess Scripture without practicing what it teaches, has the same result as when Jew’s claimed to observe the law without being faithful to the Spirit behind it: God is blasphemed among those who do not believe. In the double standards they rightly observe, people find reason to justify their irreverence.
In the larger context of the book of Romans, this passage shows how even religious people have sinned and are in need of God’s saving grace through Jesus Christ. Remembering that all of us have sinned and fallen short of God’s glory keeps us from being self-righteous and smug. It reminds us of Jesus’ words that we are to remove the log from our own eye before we try to remove a speck from anybody else’s. It keeps us from becoming arrogant.
It is awfully hard to own up to all that is wrong with us, and how badly damaged we are. It is awfully hard to admit our own faults and failings—the ones that really are hurtful, destructive and damaging. The result is that it is often easier to dwell on the problems of others than to face our own.
But that is precisely what we must do, because—as the Bible so clearly proclaims—it is when we are weak that Christ’s power is most clearly at work within us. It is only in being aware of the magnitude of the grace extended to us that we become gracious with others. It is only in realizing how deeply we are loved—and a what cost!—that we love God with our heart, mind and strength, and come to love our neighbors as ourselves.