What is the "certificate of debt" that Jesus canceled for us?

I recently heard a popular Protestant apologist argue that Colossians 2:14 is a strong proof text for Protestant doctrines such as Penal Substitution and Faith Alone. In this article, I want to look at this verse and show why this Protestant apologist is engaging in poor exegesis. The passage (briefly) is as follows:

¹¹ You were circumcised with a circumcision not made with human hands, ¹² having been buried with him in baptism, you were also raised with him through faith. ¹³ And you, who were dead in your trespasses and the uncircumcision of your flesh, God made alive together with him, having forgiven us all our trespasses, ¹⁴ by canceling the certificate of debt with its legal demands that stood against us . This he set aside, nailing it to the cross. ¹⁶ Therefore let no one pass judgment on you in questions of food and drink, or with regard to a festival or a new moon or a Sabbath.

The Protestant made the claim that the phrase "certificate of debt" here was synonymous with "sin debt," and that by "canceling" it Jesus thus received the punishment our sins deserved. While his explanation is understandable, it is not genuine exegesis, and misses out on the richness of Paul's theology. Here's why.

A powerful verse against Faith Alone (Matt 7:14)

Catholics love the Sermon on the Mount (Matthew ch5-7) but Protestants generally avoid it, since it doesn't fit with their ideas of how salvation is supposed to take place. This Sermon is full of passages that contradict the Protestant doctrine of 'Salvation by Faith Alone', and in this edition of Quickie Apologetics I want to call attention to a section of the Sermon on the Mount that we all know but don't often think of: 

Enter by the narrow gate. For the gate is wide and the way is easy that leads to destruction, and those who enter by it are many. For the gate is narrow and the way is difficult that leads to life, and those who find it are few. (Matt 7:13-14)

How often do we hear Protestants ridicule Catholics for 'complicating' Salvation. Protestants insist that 'getting saved' is so easy that all we have to do is believe, that faith alone in Christ's finished work on the Cross is all that it takes. But given the above teaching of Jesus, what is so "difficult" about the Faith Alone approach? What is so "narrow" path about it? Why are "few" saved if all they need to do is believe? The answer to all these is: nothing.

Protestants typically 'interpret' the teachings of Jesus as being either (1) meant for Old Testament folks alone, or (2) simply to show us how sinful we are, not to actually impose any commands or expectations upon us. Such is quite absurd, and effectively renders the Gospels hollow. This is why Protestants hardly ever quote/read the Gospels. The honest truth is, this is not an easy teaching of Jesus, but Catholicism has always understood that Jesus really meant it, and thus we strive to conform our life to everything Jesus taught, whether comfortable or uncomfortable.