I don't see the contradiction there, it's pretty much the thing that saying is talking about.
A community full of emotionally damaged, unhappy people is also generally full of tough, no-nonsense people who know the dangers from personal experience, know how to avoid or eliminate them, do what needs to be done, no matter the cost and then afterwards perhaps drink themselves to death while abusing their family, but many of them also ensuring that their kids have a much better life than they did - slowly creating the good times.
And a few generations later a community of happy, emotionally well-adjusted people haven't had horror in their childhood, and they don't know how to handle real adversity and recognize abusive evil because they don't have the skill and experience for that, and spend their struggle/effort over meaningless trifles and status games; are emotionally principled and don't let ends justify the means - so when eventually push comes to shove (often due to some external circumstance or an interaction with another, exploitative community) they are unwilling or unable to take decisive action and sacrifices (including moral sacrifices) to prevent someone much more violent and unprincipled from taking over and causing hard times for you (and perhaps better times for themselves at your expense).
It's essentially about a cyclic change in the tradeoff between the qualities required to be happy, satisfied and cooperative versus the (very different and often incompatible) qualities required to be effective in the face of brutal adversity. Warrior mindset is harmful in peacetime, and pacifist mindset is ineffective in wartime. And perhaps it makes sense to raise "weak" men - friendly, open-minded, forgiving, sharing, optimistic and perhaps just naively expecting the best in others - whenever we can afford to, because it's just better and more sane, and we raise disproportionally strong, brutal, ruthless, efficient (and also damaged and abusive) men and women when we're forced to by circumstances that would just grind down people like those described in the previous sentence; damaging them until they either become "strong" or just break down.
Perhaps a bit related is the issue of parenting styles. Maximizing potential of kids is often quite abusive and results in unhappy and perhaps "damaged" kids; when looking at biographies of e.g. olympic champions it often (but not always - there certainly are exceptions) seems clear that they would have been much more emotionally healthy without as much early age pressure; but they also wouldn't be champions then, they would be outcompeted by someone just as lucky in the genetic lottery but willing (or, more likely, pressured) to sacrifice more and live a less balanced life.