This post by Andrew Sullivan addresses a point I have been thinking about a lot, lately: Jesus had to know that nobody could live up to his ethical standards--nobody. Yet he came that we should have life, and have it abundantly. How to reconcile the two? Perhaps because the point of the impossibly high ethical standards is to strip away our belief that we are empowered to judge others, and have the right to condemn. I think of it as an enforcement mechanism of sayings such as "judge not, that ye be not judged," and even Jesus himself refusing to be called "good," saying "no one is good, except God alone." (Mk. 10:18-19).
And combined with that humility--or self knowledge--is always the urging toward forgiveness of all who we believe (rightly or wrongly) have sinned against us, as we are in deep need of forgiveness ourselves. In other words, Jesus is trying to get us to see ourselves as the deeply flawed people we are not to make us wallow in guilt, but to get us to give our brothers and sisters a break. We aren't to hate ourselves, but we have no right to hate others, either.
And, of course, we have to work on living a better life. Progress, not perfection.