Jesus was controversial because He showed that the natural ends to all the work of a collective of fallen, depraved sinners was evil. He was not about reinforcing some spark of goodness in depressed humanity. He was about confronting sin all around Him. Not arrogantly, for sinners were drawn to Him, but truthfully, so that people could repent and follow Him. The worst sins were done by those who disguised sinful motivations and selfish pride in beautiful religious clothing.
The context of this statement shows tragic human depravity at two extremes. The first is personal depravity represented in the brothers of Jesus. They sinned in refusing to believe in Jesus (John 7:5). And they were pressuring Him to go to the Feast of Booths in Jerusalem to make a huge public spectacle of Himself. They were motivated by pride.
The second extreme, also characterized by pride, was found in the Jewish leaders who challenged Jesus all throughout John 7. They did not believe in Him either… but their reasons for rejection were viewed as “good” even “religious” reasons. They rejected Him as well. His teaching had the unnerving affect of eliminating their profitable market share and destroying their religious livelihood.
So there are two evils to guard against in my heart. The first is my own tendency toward prideful lack of faith, wanting to take all actions, even decisions of faith, into my own hands. The second is my tendency to look “holy” by public religious spectacle, rather than to let God make me holy through private obedience and submission to Jesus. Both of these are evils that Jesus exposes in the world and in me. Only by faith, trust, and obedience to Him can I find that Jesus will heal me of them.