That is indeed what Luther’s thought implies. Really implies. Not just insinuates. But entails. If you hold what he holds, you have to hold this.
Why? For Luther, the greatest of all sins is that which Catholics call “concupiscence.” Concupiscence is the non-free inclination of the appetites to acts deviating from the good. Such deviation can be of sundry sorts: Inclining to the good of ice-cream, but beyond the measure that is due. Again, inclining to the good of heterosexual sex with one’s lawful spouse, but beyond the due measure. Or, it could be an inclination to an object that is evil, such as unnatural sexual relations.
The key is this: Concupiscence is NON-FREE. It is not the object of choice. It is not freely chosen. Because it is non-free, Catholicism defines that it is NOT SIN. Thus, it deserves no punishment. Of course, unnatural sexual actions freely chosen constitute gravely evil sin. Thus, freely chosen actions are the big concern, according to Catholic doctrine. BUT LUTHER REGARDS CONCUPISCENCE ITSELF AS THE GREATEST OF SINS. Thus, he holds that it merits of its nature eternal wrath and punishment.
Shall we stamp approval of that?
It’s wonderful to point out the positive elements in Luther. I have done so myself in sundry published works (esp. in Chap. 10 of my Engrafted into Christ and throughout my article “Sola Salus or Fides Caritate Formata: The Premised Promise of Luther’s Dilemma?”) However, whatever in these is harnessed to an evil end turns out to be evil. And there are sundry evil ends in Luther’s works. And sundry evil presuppositions. Call this an evil presupposition: Concupiscence is the worst of sins, and per se damnable. Such a horrible view of the human condition leads to the flipside horror: That God will just “turn a blind eye” to ongoing sins, because you have “faith.”