The OP makes it clear why the Mussar approach did not work for him – he never understood what mussar is about.
As noted by other posters, mussar is not about “Hashem throwing wicked people in to Gehinnom and righteous people in to Gan Eden.”
Mussar is not about our conception of HKBH at all. Of course, the Baalei Mussar agree to the idea that Hashem is “my personal Creator” Who loves and cares for me, as well as to the many other characterizations of Him given by Chazal. This, however, is not the subject matter of the Sifrei Mussar.
Mussar is about our conception of ourselves.
Mussar is about cultivating the ability to consider oneself objectively, and to measure one’s own conduct against the standard set by the Torah in an unbiased way, so as to develop one’s connection to HKBH through total adherence to Retzono Yisbarach.
In anticipation of the anti-Litvish crowd, I must point out that even in the most ardent Litvish communities, emotion and feelings are, of course, an important part of Avodas Hashem, and even of Limud Hamussar.
Chassidus, too, addresses man’s conception of self. The Sifrei Chassidus differ from the Sifrei Mussar in that they were not written specifically about this subject (at least, not in my limited experience).
From what I can tell, the difference between what we call “The Mussar Approach” and “Chassidus” is more a difference of form than of anything else, and has nothing to do with what the Vilna Gaon held was wrong.
In fact, it is not uncommon to find the Baalei Mussar and the Chassidishe Seforim expressing similar ideas, albeit in different words.
There is no question that each of these forms (as well as the many other strains of Torah Judaism that exist) resonate with some people more than others. There is no reason to denigrate any valid approach to Avodas Hashem.
cchocker – I must point out that Eilu v’Eilu etc. is always in an argument where one side holds the other is wrong. Consider, for example, the case of Tzaras Ervah, where each side held the other to be committing an Aveira.
Interestingly, Eilu v’Eilu etc. is actually stated in the Gemara in reference to where the normative halacha is decided in accordance with one side!