How Jesus' Sacrifice is effective for all humanity

The subject came up on another blog concerning what happens to infants and young children who die: I just ran across this in a book by George D. Watson, 19th century Holiness teacher, an explanation I'm not at all familiar with, but it's very interesting.

I'll quote him:

"Now the first death is that which is entailed upon us by the fall of our first parents ...

"Now this first death, which comes from Adam, both morally and physically, has been atoned for by the incarnation and death of the Son of God, so that no human being will ever be finally lost because of Adam's transgression. Jesus has purchased, by His sufferings and death and resurrection, an absolute indemnity from the fall of Adam, making ample provision for all the consequences of Adam's transgression, both for the removal of all original sin, and the raising again from the dead of every human being.

"Every infant born in the human race comes into being under the covenant
of redeeming grace. We are expressly told that, "as in Adam all die, so in Christ shall all be made alive." From this we learn that the iniquity of Adam, as an open transgressor, is not imputed to any infant in the form of actual guilt, and that the principle of indwelling sin, which is in the infant, has its ample remedy in the shed blood of Jesus. If the infant dies before reaching the age of accountability, its nature is thoroughly purified on the basis of the covenant which the Son of God made with the Father, as the second Adam, and true Head of the race.

"Thus we see that of all the millions of human beings who may be finally lost, not one of them will be permitted to attribute his everlasting woe to our first parents... [God] has dealt with the human race on such an enormous scale of mercy, justice, equity, redeeming love and impartiality, that every one will be compelled to attribute his ruin to himself."

(Steps to the throne, M.O.V.E Press 1980, pp 29-30)

There's something very satisfying about this way of looking at it. It accounts for those parts of scripture that do seem to suggest that Jesus' sacrifice was effective for the whole human race, while not supporting universal salvation. This salvation from the first death would apparently only apply to those who are incapable of accountability, very young children certainly and perhaps mentally deficient people(?) The second death is for all others, those who reject Christ.

It might even provide an answer to those who complain that people who have no chance to hear the gospel shouldn't be punished for that. It suggests a level of salvation that is not full salvation, yet both provided by the sacrifice of Christ.

Needs more revelation.