I've always assumed that the demon blood is just addictive, sort of like crack and Sam is addicted to it. I don't think he needs it to use any of his mojo, but I do think he still has that mental block firmly in place (mojo=bad) so in order for him to 'let go' to use it, he needs the demon blood as a crutch.
IMO it all still boils down to the idea that Sam doesn't want to be a monster and doesn't want his brother to see that he's a monster. So he can't use his powers on his own because using his powers is final, irrevocable proof that Sam is a monster. Sam already knows that using the demon blood makes him a monster, but that's something from outside that he's allowing inside himself. It's a choice he's making to do this. Using his powers on his own tho? That's proof to himself that he's monster through and through.
And also it seems that Lucifer needed his vessel to drink gallons of demon blood, so I've always assumed that's part of why Ruby was feeding it to him, to get him addicted to it thereby making him more ready for Lucifer.
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IMO it all still boils down to the idea that Sam doesn't want to be a monster and doesn't want his brother to see that he's a monster. So he can't use his powers on his own because using his powers is final, irrevocable proof that Sam is a monster. Sam already knows that using the demon blood makes him a monster, but that's something from outside that he's allowing inside himself. It's a choice he's making to do this. Using his powers on his own tho? That's proof to himself that he's monster through and through.
And also it seems that Lucifer needed his vessel to drink gallons of demon blood, so I've always assumed that's part of why Ruby was feeding it to him, to get him addicted to it thereby making him more ready for Lucifer.