Rage - I agree with you (whoa! mark down the date! :D) that treating this as an addiction is probably the best way to deal with it. For almost anyone masturbating, anyway, it comes darn close to the DSM-IV's criteria for substance abuse and substance dependence (even though those are talking about physical drugs).
But for people who don't feel that it's destroying their lives, it might be important for them to know the reason they should work on this issue before, say, talking in shul. The guilt is not a good method for dealing with the issue, but realizing how important an issue it is, is necessary.
yes, you can find an extreme saying from chazal for lots of aveiros. However, this one's got a lot of 'em, including soem more extreme than the one you posted.
More importantly, though, to my mind, there ARE halachic ramifications. So it's not just an esoteric agadata gemara, that we can say, "well, I don't understand what that means, when I have a chance to check up what the maharal says, I'll get back to you."