The phrase "Adam lost for himself and all succeeding generations the supernatural gift of sanctifying grace" should jump out immediately. Note the explanation given by A.A. Hodge:
17. What is the Romish doctrine with respect to thedona naturalia , and thedona supernaturalia ?
1st. They hold that God endowed man at his creation with the dona naturalia, that is, with all the natural constitutional powers and faculties of body and soul without sin, in perfect innocence. There was no vice or defect in either body or soul.
2nd. God duly attempered all these powers to one another, placing the lower in due subordination to the higher. This harmony of powers was called Justicia —natural righteousness.
3rd. There was, however, in the very nature of things, a natural tendency in the lower appetites and passions to rebel against the authority of the higher powers of reason and conscience. This tendency is not sin in itself; but becomes sin only when it is consented to by the will, and passes into voluntary action. This is concupiscence(a strong desire); not sin, but the fuel and occasion of sin.
4th. To prevent this natural tendency to disorder from the rebellion of the lower elements of the human constitution against the higher, God granted man the additional gift of the dona superanaturalia, or gifts extra constitutional. This is original righteousness, which was a foreign gift superadded to his constitution, by means of which his natural powers duly attempered are kept in due subjection and order. Some of their theologians held that these supernatural gifts were bestowed upon man immediately upon his creation, at the same time with his natural powers. The more prevalent and consistent view, however, is that it was given subsequently as a reward for the proper use of his natural powers see Moehler’s “Symbolism,” pp. 117, 118.
5th. Both the “justicia,” and the “dona supernaturalia ” were accidental or superadded properties of human nature, and were lost by the fall.
18. How does this doctrine modify their view as to original sin and the moral character of that concupiscence which remains in the regenerate?
They hold that man lost at the fall only the superadded gifts of “original righteousness” ( dona supernaturalia), while the proper nature of man itself, the dona naturalia, comprising all his constitutional faculties of reason, conscience, free will (in which they include “moral ability”), remain intact. Thus they make the effect of the fall upon man’s moral nature purely negative. The Reformers defined it “the want of original righteousness, and the corruption of the whole nature.”
Hence, also, they hold that concupiscence, or the tendency to rebellion of the lower against the higher powers remaining in the regenerate, being natural and incidental to the very constitution of human nature, is not of the nature of sin.
Luther wrote on the scholastic distinction between the naturalia (which remained after the Fall), and the donum superadditum of grace (which was withdrawn and had to be restored by God):
The scholastic statement that “the natural powers are unimpaired” is a horrible blasphemy, though it is even more horrible when they say the same about demons. If the natural powers are unimpaired, what need is there of Christ? If by nature man has good will; if he has true understanding to which, as they say, the will can naturally conform itself; what is it, then, that was lost in Paradise through sin and that had to be restored through the Son of God alone? Yet in our day, men who seem to be masters of theology defend the statement that the natural powers are unimpaired, that is, that the will is good. Even though through malice it occasionally wills and thinks something besides what is right and good, they attribute this to the malice of men, not to the will as it is in itself. The mind must be fortified against these dangerous opinions, lest the knowledge of grace be obscured; this cannot remain sound and right if we believe this way about the nature of man. Nor can this scholastic teaching be tolerated in the church: that man can keep the Law according to the substance of the act, but not according to the intention of Him who commanded it, since according to His intention not only the work is required, but also a disposition in the heart which is called grace. This would be just like saying that a man who is sound in hands and feet can properly do his job, except that he is hindered by not being dressed in black or white clothes. In exactly the same way they say that God requires something beyond the Decalog and is not satisfied when someone keeps the Decalog, but requires a right disposition as well. All these monstrosities have arisen from the fact that they do not rightly know the nature of sin. I have listed them to show the great difference between our sound doctrine and the monstrous and deceptive doctrine of the pope.[LW 12:308]
The scholastics argue that original righteousness was not a part of man’s nature but, like some adornment, was added to man as a gift, as when someone places a wreath on a pretty girl. The wreath is certainly not a part of the virgin’s nature; it is something apart from her nature. It came from outside and can be removed again without any injury to her nature. Therefore they maintain about man and about demons that although they have lost their original righteousness, their natural endowments have nevertheless remained pure, just as they were created in the beginning. But this idea must be shunned like poison, for it minimizes original sin.
Let us rather maintain that righteousness was not a gift which came from without, separate from man’s nature, but that it was truly part of his nature, so that it was Adam’s nature to love God, to believe God, to know God, etc. These things were just as natural for Adam as it is natural for the eyes to receive light. But because you may correctly say that nature has been damaged if you render an eye defective by inflicting a wound, so, after man has fallen from righteousness into sin, it is correct and truthful to say that our natural endowments are not perfect but are corrupted by sin. For just as it is the nature of the eye to see, so it was the nature of reason and will in Adam to know God, to trust God, and to fear God. Since it is a fact that this has now been lost, who is so foolish as to say that our natural endowments are still perfect? And yet nothing was more common and received more general acceptance in the schools than this thesis. But how much more foolish it is to make this assertion about the demons, about whom Christ says that they did not stand in the truth (John 8:44) and whom we know to be the bitterest enemies of Christ and of the church!
Therefore the perfect natural endowments in man were the knowledge of God, faith, fear, etc. These Satan has corrupted through sin; just as leprosy poisons the flesh, so the will and reason have become depraved through sin, and man not only does not love God any longer but flees from Him, hates Him, and desires to be and live without Him. [LW 1:164-165]