The Bible says that we're to be primarily concerned if WE OURSELVES are keeping His commandments, not the other guy. And, trust me, each one of us knows when we're acting contrary to the will of God.
If by "legalism" you mean attempting to earn salvation, we should all be fully aware that Jesus proved that impossible in Luke 17:7-10, so it's not necessary to state the obvious.
If by "legalism" you mean the "good works which God hath before ordained that we should walk in them" or "if ye love Me, keep My commandments", you should probably reconsider your position while you still have time to do so.
No, it says everyone has "fallen short" - past tense.
What does this same Bible say about the redeemed? "...we keep His commandments and do those things which are pleasing in His sight."
Yes, the Law of Moses ended at the Cross which is why lamb sacrifices and circumcision are not longer required. Now, publicly declare that we may worship Satan and curse God's name and still go to heaven or declare the saint is as obligated to keep the Ten Commandments now as all the way back in the garden. Which is it?