Nee said that the human spirit and human soul do need to be divided, and that
Heb 4:12 says it is the goal of the sword of the Spirit, the Word. Many think they are one and the same faculty within us, but they are not.
But it's not just soulish desires that are the reason for this need of division, but the overall natural inclinations that stem from the soul. For example, the soul is affected by the outward world around us, and can hinder our spirits if they are not divided from our spirits. It made me think of how some people are roller coaster sorts of people, where the outward influences from the world affect their spirituality when they should not. Nee once said that a rainy and miserable day outside can actually cause people to not worship the Lord together as much as the would should the day be sunny and nice. This of course is due to carnality.
He even taught how the early church did not have all the fancy musical instruments we have today. Imagine church services without good music and good singers, with a cloudy and rainy day outside. Then imagine church with beautiful professional music and awesome singers in a bright sunny day. Carnality would cause many believers to hardly worship the Lord in the rainy, lack of music setting, whereas they would likely praise more intensely in the nice setting. If the soul was separated from the spirit, this would not be the case. The spirit would be uninhibited from worshiping regardless of the influences from the surroundings.
The soul drags the spirit down if they are not separated. I think Nee was spot-on on this issue.