1 John 2:2 The whole world?

1 John 2:2 and he is the propitiation for our sins: and not for ours only, but also for the sins of the whole world.
This scripture seems to take the guts out of the doctrines of grace, especially the efficacy of Jesus Christ’s atoning work on the cross. If he actually died for the whole world then the fact is inescapable that He and God the Father, and the Holy Spirit have failed in what they intended to accomplish. Also, if His atoning work was for the whole world, if He died for the whole world, none would go to the hell which Jesus speaks of 11 times in scripture.
The classical arminian view is that Christ only suffered for our sins, He actually died for no one, He only made salvation possible. In this view it could be entirely possible that no one would ever benefit from Christ’s sufferings. This view is called the “Governmental Theory”, and according to governmental theory, Christ’s death applies not to individuals directly, but to the Church as a corporate entity. Individuals then partake of the atonement by being attached to the Church through faith. It is also, therefore, possible to fall out of the scope of atonement through loss of faith.
It important for us to understand what Scripture says about Christ’s intent. Let’s look at Matthew 1:21 “And she will bring forth a Son, and you shall call His name Jesus, for He will save His people from their sins.” The angel when speaking to Mary the mother of Jesus does not mention the whole world, he speaks of a specific people, and a definitive effect of Christ coming. Further study can be found in John 10:11/14-16/26-29, Acts 20:28, Eph 5:25-27, and finally if Christ actually died for everyone then Romans 8:31-33 cannot be true.
It’s important to note as well, that if Christ died for everyone, which is not the arminian view, if he suffered or was punished for all our sins, if the wrath of God against sin was poured out on Him, and then you as part of the world choose not in this life to make a decision with your “free-will” to accept this offer and are sent to an eternal hell. God has required double payment for your rebellion. He paid it in full in His Son and requires the payment of you as well, how unjust.
So what does this passage mean?
You have to know a little history about the nation of Israel; God’s chosen people, the “elect” nation. For all of recorded history He/God had been the God of one nation, all others were outside the covenant. This is best represented by the story of Jonah, who when God told him to go to the city of Nineveh and preach the gospel he fled instead, not because he was afraid, but because of his prejudice. He knew God was a merciful God and would show mercy to these brutes who had brought much misery on the nation of Israel. You know the story, he finally gets there and yes God shows mercy. How does Jonah respond, or rather how would you respond if sent to a city to preach the gospel and the whole city came to Christ? You would rejoice… right? What does Jonah do? He gets mad Jonah 4:1 but it displeased Jonah exceedingly and he got very angry, and in 4:3 he wants to die, he requests that God take his life. This is the world the Apostle John is speaking to, a world that felt a person must become a Jew before they can truly become a Christian, an extraordinarily prejudiced people.
In John 10:16 Jesus says, “And other sheep I have, which are not of this fold: them also I must bring, and they shall hear my voice; and there shall be one fold, and one shepherd”. The world therefore is “every nation”, He has chosen a people for Himself out of every nation, and His atoning work is efficacious for them.
He beckons us to join Him in this mission with the chief aim… God’s Glory!