I think you're right. I think that is a great way to explain the issue.

It seems to me that the nondualistic philosophies and wisdom traditions of the world handle this truth very nicely.

Healthy ego is good. Lack of ego entirely is good. Not needing to distinguish "two" selves anymore is even better.

That last transcendental part of it is what I think is reflected in the idea of Jung's individuation process. Once psychological "integration" is achieved, one does not need to really ponder the disintegrated state from whence you came.

At least that's how I look at it these days. I'm far from individuated but I'm a lot happier with myself than I used to be.