By Dr. Wayne Grudem in Systematic Theology (IVP & Zondervan, 1994. pg. 727)

One sometimes hears the popular explanation that justified means “just-as-if-I’d-never-sinned.” The definition is a clever play on words and contains an element of truth (for the justified person, like the person who has never sinned, has no penalty to pay for sin). But the definition is misleading in two other ways because (1) it mentions nothing about the fact that Christ’s righteousness is reckoned to my account when I am justified; to do this it would have to say also “just-as-if-I’d-lived-a-life-of-perfect-righteousness.”  (2) But more significantly, it cannot adequately represent the fact that I will never be in a state that is “just-as-if-I’d-never-sinned,” because I will always be conscious of the fact that I have sinned and that I am not an innocent person but a guilty person who has been forgiven. This is very different from “just as if I had never sinned”!  Moreover, it is different from “just as if I had lived a life of perfect righteousness,” because I will forever know that I have not lived a life of perfect righteousness, but that Christ’s righteousness is given to me by God’s grace.  

Therefore both in the forgiveness of sins and in the imputation of Christ’s righteousness, my situation is far different from what it would be if I had never sinned and had lived a perfectly righteous life. For all eternity I will remember that I am a forgiven sinner, and that my righteousness is not based on my own merit, but on the grace of God in the saving work of Jesus Christ. None of that rich teaching at the heart of the gospel will be understood by those who are encouraged to go through their lives thinking “justified” means “just-as-if-I’d-never-sinned.”