Any group standing for a cause will inevitably have to sanction one of their own if a member's behaviour contradicts that cause. The Corinthians had such a case, and an extreme one at that. The bottom line is that our behaviour matters - if we are no different to those around us then we show no obvious signs that we have been saved from anything, and we set no contrast to society.
The practical difficulty of course is where to set the boundary. Culture around us shifts, and lines of morality with it. One clue in this passage is that the particular case was so bad that even non-believers would not tolerate it - so we certainly cannot sink lower than society's norms. Yet verses 5:11 and 6:9-10 suggest that we should not be persistently be behaving in ways that belong at the bottom of the relative moral soup either - we are called to better!
There are times when the Christian faith should challenge culture. In creation God brought order out of chaos, which implies standards of absolute morality will indeed exist.
Yet note that Paul makes it a community decision to deal with the immoral believer (see v2 and v4). Yes Paul had made his own mind up, but he did not appeal to a fixed authority, nor to his own authority as an apostle - the fellowship needed to come to its own decision in Christ. Also see how Paul leaves final judgement of the individual up to God. Interpretation of v5 is tricky, but eventual salvation seems possible. This episode is about discipline within the membership, not about whether the person is actually saved.
Note that Paul doesn't talk here of what to do if/when the individual repents (though the 2nd letter gives us clues). Nor does he discuss the case of a new believer who is getting their life sorted, but it is taking time. Instead there is simply the 2-standard system of non-judgement for non-believers and higher standards for those in the fellowship. Essentially Paul is driving for purity among the fellowship - hence our key question and challenge this week:
Key Qn: [IN] Is God calling you to greater purity?
Key Challenge: Name one area of your life to 'live better' going forward