This is a postmodernist piece, consequently it is a lot of complicated words to say wise but simple things. My main gripe with postmodernism has always been its overly blah-blahing language; Nietzsche is the master of this. Thus, I will condense this one to as short and simple a summary as I can muster.
Firstly, Nietzsche wants to explain to us that altruism is done only by those who need it. He does not explain what his thoughts are on the need for altruism, only what it is grown out of.
Straight out of the gate, Nietzsche tells us that altruistic judgement comes from feeling badly placed in life. If you believe you have it hard, you will more likely judge others (and yourself) by how selfless they (or you) are.
He uses two sample groups: moralists like socialists and Christians. Both groups hate egoism - the socialists hate it in others, the Christians in themselves, and thus they advertise for altruism. Why do they hate egoism? Because it ignores their feelings of incompetence.
Nietzsche alleges that those who feel themselves disadvantaged are always searching for a scapegoat to justify their very existence, because if no one is to blame for their inadequacy, how would their bear to live?
The Christians use “sin” to help themselves. It is easier, Nietzsche says, to feel guilty than to not have an explanation why one is miserable. The socialist (and nihilist and anarchist) blames the powerful for his plight. Both are full of anger and in need of revenge which they get by enduring (and asking others to endure) and resenting those who do not (have to).
Revenge is a pleasant feeling. One triumphs over hardship. To use endurance as revenge, one must find something to revenge first.
Without someone being responsible, no one can endure selflessly.