In Notes from the Underground, hyper-consciousness distinguishes the Underground Man from the rest of the world. Cursed with acute-awareness, he can't act because consciousness causes him to believe that no action is truly justified. If a conscious man can't act, the argument goes, then he can't ever become anything. This notion of "the conscious man" is tied with "the intelligent man" and also "the decent man," so the concept carries both moral and intellectual implications. Although consciousness arises from suffering, allows for suffering, and necessitates suffering, it also makes possible free will and individuality. With consciousness, man must suffer, but without it, man will never be free.
The Underground Man uses his hyper-consciousness as a scapegoat for all his personal failings.
The flaw in the Underground Man's argument lies in his inability to distinguish between "consciousness" and "intelligence."