What's The Purpose of Church?

I got into an interesting discussion today with some other pastors.  I want to give you details of the discussion; however, I will do my best to not give you my opinion.  I do want to hear your comments and see what you think about it.  Here it is:  "What is the purpose of church?"  Is it so that we can save souls?  Is it to strengthen the body of believers?  Is it to equip the people to do ministry outside of the church?  These are all good questions.  One of the youth pastors feels that it is not necessary for churches to worry about trying to get people saved in their Sunday Morning ministry.  He said that the place to get people saved is outside of the four walls of the church.  The Sunday morning should serve only to give believers the knowledge and wisdom on how to reach others and grow spiritually.  I find this to be interesting.  His feelings were that we forsake holiness in our church services in order to attract the world to our churches.  He doesn't feel as if the world is attracted to our churches anyway, so why lower our spiritual standards by allowing willingly sinful people into our services on an on-going basis if they aren't trying to change.  What do we do with the passages of Revelation where Jesus tells some of the churches in chapters 2 & 3 that if they allow people in their congregation who are practicing sin to continue to show up then God will remove His Spirit from there?  What do we do with the passages of scripture that tell us to beware of wolves in sheep's clothing?  These are all good questions.  Our fear is that if we react to this frame of mind then we become cold-hearted and unloving.  Is there a way to be both?  Can you be warm, loving and totally closed-minded to sinners who are fully embracing their sin?  Notice that I said, "fully embracing", this does not refer to sinners who are coming but want to change.  There is more dialogue to this conversation; however, I would like to hear what all of you think about it.  I am willing to give my input, but for now I would just rather hear yours.  I'm not saying that I agree; however, I am not saying that I don't either.  I'm searching at this point.