I think a lot of LDS misinterpret the BOM passage, "...for we know it is by grace we are saved, after all we can do."
Some try to say we have to do all we can before we are eligible for grace. By that impossible standard, the Celestial Kingdom will be utterly empty because nobody, ever, has done "all he could have done."
So what does it mean? I take it to mean "after all we can do, it is by grace we are saved." You could try and try, and try some more, but there is no salvation for you except by the atonement of Christ (grace).
I don't believe, and neither should any Mormon, that God requires an impossible standard of perfection. He requires a broken heart and a contrite spirit, and a covenant that covers us in grace.