Retaining a sense of inadequacy is not a bad thing, in and of itself. It helps blunt our natural egotism and keeps us focused on growth and change (repentance) - or, at least, it does in proper balance and moderation.
It's when it turns toward self-loathing and becomes a shackling tool that it becomes "bad".
Theologically, this plays out in the classic debate over faith vs. works. Understanding that we never will merit salvation strictly on our own merits can be seem as "retaining a sense of inadequacy" - and it can be a very good thing. However, when it is stretched to the extreme and becomes a justification for the idea that there is an unbridgable gap between man and God, at that moment it becomes a "bad" shackling tool. It's the theological balance that says we can never deserve what is promised to us through the Atonement, but it still is promised to us through the Atonement, that is empoweing and noble and enlightening and liberating.
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