There is exactly one way for a person to be accepted by God, and that is in Christ. We are justified freely from all things when we believe (Acts 13:39), but being justified and being accepted aren't exactly the same thing.
Philippians 3:9 makes this clear: if we are found in Him, then we don't have our own righteousness. "[M]y own righteousness" necessarily brings in law (Philippians 3:9). Law is a statement of what I ought to be: there is no righteousness of my own, except by law. But Galatians 2:16 assures us, no one is justified by the works of law. There is no way I can achieve righteousness of my own.
We sometimes describe being "in Christ" like this: when God looks at me, He doesn't see me, He sees Christ. When God looks at me, He doesn't see my sins, He sees Christ. I think that's exactly what Ephesians 1 is talking about. But there is another side to that: when God looks at me, He doesn't see my righteousnesses, He sees Christ. See? This is a two-edged sword, and it cuts both ways. On the one hand, my sin is invisible to God, because He sees me in Christ. On the other hand, all of my righteousness is hidden from sight– just as hidden as my sin– because I am in Christ.
That's Philippians 3:9, isn't it? "that I may be found in Him, not having my own righteousness". You can't be "in Christ" when it comes to sin, but on your own when it comes to righteousness. If I am "in Christ", then all that I am– the good as well as the bad– is gone from God's sight.
Now, sometimes we're not content with that. And so we try and establish a righteousness of our own. But we really can't claim righteousness without (as it were) stepping out of Christ. As long as we're "in Christ", God doesn't see my righteousness. Now we can't really step out of Christ, but it's what we're effectively trying to do when we try and establish ourselves as righteous before God. And when we do that, we end up right back in Romans 7.
Accepting that I am in Christ means accepting that I am past trying to establish a righteousness before God. In fact, it means accepting that God's really done with me. He's not trying to improve me, He's not trying to salvage anything of me. That's really the teaching of Galatians 2:20, "yet not I".
I think this is the real difference between Romans 7, "when we were in the flesh" (Romans 7:5 & 6), and Romans 8, "ye are... in the Spirit" (Romans 8:9). In Romans 7, a man is trying to establish righteousness. He's not content with the righteousness of Christ, but wants his own. That must lead him to law (Philippians 3:9). But in Romans 8, we have a man for whom there is "no condemnation" (Romans 8:1), a man who is content with the righteousness of Christ.
This is so simple, but it's hard for us to get a handle on it. We refuse to believe that God is not trying to salvage the flesh. We must– we must– accept what God says about us. We need to be like Paul in Philippians 3, content to be "found in Him, not having my own righteousness".
This obviously doesn't mean Paul is content to continue to live as a sinner, hiding (as it were) in Christ. No, there is a human responsibility there. I am in Christ, this is God's sovereignty. Human responsibility comes in the next verse: "to know Him" (Philippians 3:10).
God's giving up on the flesh is not an excuse simply to indulge its passions and its lusts. We are to walk as He walked (1 John 2:6). There is to be a reality in our lives, and an integrity that's visible to people around us.
But the power to live the Christian life is really only for those "in the Spirit" (Romans 8:9), who "by the Spirit mortify the deeds of the body" (Romans 8:13). The Christian life (practically speaking) rests on accepting our place "in Christ", not attempting to add anything to that, and not accepting anything less.