I enjoyed this article so much! Although I'm not a psychotherapist I can truly appreciate your words of wisdom. I happen to be very passionate about people and find it hard to "analyze" an individual without appreciating what they have been through that contributed to their current circumstance.

I like your clear articulation of what I see as an existential approach to psychotherapy. You are right that diagnosing patients according to DSM-IV-TR can and does get in the way of understanding who they are as a person rather than a mere diagnostic label. Nonetheless, as an existential psychotherapist myself (I call what I do "existential depth psychology"), I recognize the clinical value and importance of psychodiagnosis in the treatment process. The trick is not to take the diagnosis too reductively or literally, seeing that it is just a way of describing certain archetypal behavioral and symptom patterns suffered by the patient and/or those around him or her. The diagnosis is a starting point to understanding the patient, not an end point. The patient is much more than his or her diagnosis. And, as DSM-IV-TR itself makes clear, the diagnosis does not necessarily indicate the etiology or cause of the disorder, but is primarily descriptive or phenomenological. In existential psychotherapy, we speak of trying to relate to the patient's "being" by using the phenomenological method of putting aside (but not ignoring or denying) preconceptions about them and their problems, including their diagnosis.

As for the notion of "shrinking" in therapy, this still makes some sense from a Jungian perspective. The patient's ego or persona, with which they tend to be overidentified, often needs deflation or shrinking. The ego must become subservient to the greater self. This is why Jung commented that the emergence of the self is always initially experienced as an insult to the ego. So, in this sense, the psychotherapy process "shrinks" ego while expanding the self.