Yes, I do believe you have the essence of it. And I think, at the risk of a brief aside, that it's funny we would ask about a potentially discouraging theology in Lutheranism in direct contrast to Barth's own kind of neo-Calvanism. Being pulled as a log out of a fire doesn't depend on what the log thinks about it.
So, no, comparatively, having to wonder whether or not one is a log on fire, having one's own answer to the question matter, is indeed comparatively more empowering. As an ecumenical student, I have to say it's not quite as good as Wesley, where the fire of sin is replaced by the fire of the Holy Spirit and we burn and are transformed in an entirely new way, a sort of upward spiral - that, that would be more empowering still.
But we mostly just read Reformed people here at Luther Seminary, so no, , the simul is not discouraging, because Luther's simul isn't a prescriptive theological move; he's just describing the way Christians human beings are in the world: saint and sinner. Everything we do is tinged by sin; doesn't mean we shouldn't do it. Indeed, if it's true even then we're freed from perfectionism and from hubris, we're free to act in fallen service to an unfallen God, and freed from our own expectations of success and anxieties of desire. It might be even said to be more empowering, in a perverse sort of way.