In the foreword to Of Human Bondage I found some words from Maugham which seem to sum up the writer's predicament:
Though authors are touchy about their productions and inclined to resent unfavourable criticism they are seldom self-satisfied. They are conscious how far the work on which they have spent much time and trouble comes short of their conception, and when they consider it are much more vexed with their failure to express this in its completeness than pleased with the passages here and there that they can regard with complacency. Their aim is perfection and they are wretchedly aware that they have not attained it.
We strive for an excellence we'll never achieve but where do you draw the line? When do you give up on perfecting something and settle for what it actually is on the page? Anybody who's serious about their craft knows that the first draft contains a myriad of errors. You have to resolve these to your satisfaction. But then you may think that your second draft is as incomplete as your first. So you try it again and again. You could spend your life trying to perfect one manuscript but if you manage to get it up to your exacting standards on one draft you'll become disillusioned with it on the next.
You have to let go. I'm terrible at this. I have two manuscripts I've redrafted four times apiece. I'll concede that they are a lot more coherent and structured than they were in the first draft. I'll admit they make me smile, want to cry and also ache in appropriate sections. My characters are much more rounded and realistic than when I first started and, for the most part, I think they sound more individual too. Yet I'm still not happy. I'll never be happy. I want to rework them a million times. If I allow myself that luxury there's no chance they'll see the light of day.
A good way of fighting this is passing your writing onto other people who will give you relatively honest criticism. If you let go long enough to allow one person to take a peek then you might be ready to face the hurdle of submission. I'm almost there. Actually, I am there. Maugham reminded me that absolute perfection is unattainable and you have to compromise with yourself sometimes.