Sin is sin. Never forget the price of that sin that our Savior paid on the cross. If we are to leave the World, live as Christ would, how can ANY true Christian even begin to think sin is okay or just? They are blinded by false belief, tricked by ways of the World. Again, to clarify, if someone outside of the Church is sinning, who does not proclaim themselves as Christian, it is not our duty as Christians to judge that person or persons(s). That is God's duty to give those souls the opportunity to know Christ. And it is our place to show them by example, so they may see the good works we do, and want to follow the path of righteousness. They are NOT aware of sin. So we are not in the standing to judge them on that sin, for they don't even know they are sinning. And because of that, they cannot yet repent.
-BUT- it IS DEFINITELY our job as Christians to JUDGE righteously those in the CHURCH who proclaim sin as okay. Doing so in a firm knowledge of the Word, and in a patient- compassionate way as Christ would. Don't be lukewarm or extreme. Be as Christ was.
I agree, it's not possible to overcome with Christ if we discard the truth about the obstacles we are meant to overcome. It's disheartening when the world bends ethics for it's own purposes and more so when Christians bend theology to go along with the world. However once the truth of what is right and wrong is recognized, the solution is always to realign focus on God... not on the wrong, or on how wrong we are or how wrong someone else is, but on how right God is.
As for judging, I think we are meant to mature into judging and discerning whether things line up with God's values of truth, love, and life.
I think the 'judge not' passages referred to people applying standards outwardly, that they could not bear having applied to themselves. I've heard a teacher (Ian Clayton) say that we are supposed to receive the judgement on ourselves first, which we can bear with Christ, and then we have authority to judge others.
Even then I think it's fruitless to judge someone's salvation, future, or their relationship with God, because this is known only by God. But to judge whether an action is right or wrong, and what the fruit of it is, this is encouraged for the sake of changing it in a positive direction (if you aren't helping to change it in a positive direction, you need to figure out how to help instead of just saying things are bad).
Using right judgement even includes rejecting people's descriptions and judgements of themselves. When people define themselves by their sin, by calling themselves sinners or various sin-related terms, or even unknowingly by calling themselves any of the false identities the world gives, these are self-judgements and self-definitions that we are meant not to accept. Withholding judgement sometimes is also powerful, if it's 'not our jurisdiction' spiritually. It makes room for grace and to be able to support a person. But again, that is judgement of the person... judging their actions, the cycles of thought-action-result which may even become a lifestyle, judging any bad values, all is necessary in order to preserve and empower Holy Spirit alternatives to those things.
Even calling something good is a judgement, and it's necessary to focus on the good to keep going, so if you only ever perceive the wrongness of things then it's important to ask God what's tampering with your perspective.
“The eye is the lamp of the body; so then if your eye is clear, your whole body will be full of light.But if your eye is bad, your whole body will be full of darkness. If then the light that is in you is darkness, how great is the darkness!" (matthew 6:22-23)