He is within us in order to be able to use us. But he cannot use us if He is not allowed to manifest out through our lives. And a fleshly minded soul is like a barrier that hinders Him from coming through the vehicle of the soul and out to minister to the world. The very need for us to abandon works in our desire to achieve God's blessings is the need to abandon fleshliness, for works fall under the category of outwardness and fleshliness. Self can thrive in the things of the world without being broken.
Fallen man possesses a soul from birth that is directed towards the material things of the world.
And the world is in sin, rendering the soul's desires sinful. But in order to serve God, self, or soul, must be broken. We must see soul broken by experiencing a death with Christ to the things of the world, and a new start of turning to the higher things of the Spirit. The love of the world makes on an enemy of God. Here, in this aspect of breaking, we find the barrier that hinders our walk forward with God.