TL:DR character vulnerability allows us to be more engaged and immersed, because these feelings can affect us even when we are holding a character in arms length. The GM treads a careful line where he can be a douche or a great story teller, when tugging these heartstrings.
When I played Jia, under +Mark Knights one of my most favorable experiences in the game is when the past of the character, his failures, caught up to him in a difficult challenge. It was in your face, engaging, and there was some pain in it when it came up.
The pain was a good thing, because I felt really immersed in his motivations and decisions. I was even shocked a bit and had nothing to say. I realized that when we have characters in a lethal game, we have to keep them at arms length. I began to wonder how many people really do play with their characters in arms length? On the assumption that everyone does that, then how do we get affected by the characters conflicts - how do we get feel things, even if it's just a tinge.
That is when I got to think of the old "I have no family or loved ones" trope of characters. The character that has no roots, has no loves, and is shaped by motivations that can turn him against the other players easily. Work has given me a taste of how it is to work with such people and how they create hostile work environment so I'm surprised when people would play such characters. It doesnt help that its very much romanticized. To make a party of such people makes me wonder if gamers believe that in such situations, humanity is a hindrance?
There is no solution or answer to having a character who is vulnerable because of family, friends, loved ones, goals, and the desire for security and peace. If I think players can hold their character in arms length, should they make the character's psyche so invulnerable that only power, money, or survival matter? Then what experience do you get from the character? In a game where we can kill imaginary beings, and its all in our head what does it say about is really important to us in such matters.
Of course the GM is also in a precarious position when using the character's vulnerability to push the story forward and become engaging. In this situation, the GM can easily cross the line because everyone won't know where it is until he's crossed it.
There is no real play book on how the GM can do this without being to big a douche. I can imagine many GMs having flash back of their GM who twisted the knife cause it was fun, instead of twisting it for some other metric. One that at least considered the enjoyment of the players. One simple rule of thumb I use is to just play out the scene with drama and gravitas in a few lines, and leave it up to the player to bring it up in the future or dwell on it more if he wants to use that character's pain as a source of storytelling or they would rather forget it all happened. In the game table we enjoy the game in our own way, we take what we want and are free to leave the rest behind.
Internal conflict that does not make things an easy decision Is what happens in the end. Having no right answers, and to be filled with doubts is where this kind of thinking leads. Well its a game, and these inconvenient doubts can be forgotten and dropped as they have no impact in one's life.