Un/ Limited Atonement

As John ends chapter 1, we might get the idea that if I can't be sinless I might as well not try. God will forgive me if I confess my sin, so I'll just rely on that and not try to live up to His holiness. Just in case we come away with that attitude, John adds in the first two verses of chapter 2 this statement, "My little children, I am writing these things to you so that you may not sin. And if anyone sins, we have an Advocate with the Father, Jesus Christ the righteous; and He Himself is the propitiation for our sins; and not for ours only, but also for those of the whole world."
These two verses really end the topic of chapter 1. John was not giving us permission to be loose with our morality because God will forgive if we confess. He was writing those things so that we would not sin. John's desire is to see Christians put off sin and put on righteousness, to 'be holy as the Lord your God is holy.' Sin is contrary to the holiness of God.
Yet John also recognizes that Christians are still tempted by sin and will slip up. Fortunately, he reminds us that Jesus' death covers this sin as well. In fact, Jesus stands before God as an advocate, literally Jesus is praying for us. He doesn't want the people whom He has bought with His precious blood to fall away from the righteousness of God and become useless and defeated Christians. What does Jesus pray for us? We have an example in Luke 22:31-32, "Simon, Simon, behold, Satan has demanded permission to sift you like wheat; but I have prayed for you, that your faith may not fail; and you, when once you have turned again, strengthen your brothers."
John also reminds us that this Advocate who is praying on our behalf is the same Christ who, being absolute righteousness in and of Himself, became the propitiation for our sins. That means that Jesus satisfied the righteous demands of God's law and opened a way of restoration in our relationship to God. Jesus covered our sins with His own blood, so that we could stand before God acceptable, not by our work or merit but by His.
The final phrase of verse 2 might challenge some theological positions. The propitiation that Jesus worked out on the cross is not only efficient to provide salvation for those who believe but it is also sufficient to provide a way of salvation for those who have not yet. The reality of salvation, restored relationship and removal of sin is present for the believer; the potential of salvation, restored relationship and removal of sin is present for the unbeliever. God does not swiftly and harshly punish sin in the lives of Christians, He also is gracious to not swiftly and harshly punish sin in the lives of those who are not Christians. This is achieved not because God sees some spark of goodness in us that might be fanned into a flame, but only because of the propitiation that Jesus provided for us.
What are your thoughts on this theological position? Limited atonement or unlimited atonement?