Maybe I have mis-read this (MN10, Thera, I take covetousness = desire for, grief = dislike/aversion):
"Here, bhikkhus, a bhikkhu lives contemplating the body in the body, ardent, clearly comprehending (it) and mindful (of it), having overcome, in this world, covetousness and grief; he lives contemplating the feelings in the feelings, ardent, clearly comprehending (them) and mindful (of them), having overcome, in this world, covetousness and grief; he lives contemplating consciousness in consciousness, ardent, clearly comprehending (it) and mindful (of it), having overcome in this world covetousness and grief; he lives contemplating mental objects in mental objects, ardent, clearly comprehending (them) and mindful (of them), having overcome, in this world, covetousness and grief."
To me this points to comprehending ie seeing clearly - not deliberately followed by a further reaction eg aversion, approval etc. The 'overcoming' seems to me to be possible by seeing desire and aversion for what they are - mental artefacts that just appear similar in some ways to any arbitrary thought which is obviously not-self eg I now think of my car - that thought about a car, not by fighting them with further deliberate reactions which could go on ad infinitum. So to overcome is to render empty - not to stamp on until it (perhaps) goes away. This is not to deny the existence of a self - just not to be misled into thinking things to be self that aren't. I don't think I have enough insight to (yet?) see things much more clearly / deeper.
In your quote I would separate the young woman in everyday life who is naturally horrified, from the monk who coolly sees that something is unskilful. Maybe I misuse the word 'judgement' - or maybe there is a difference between judging a person and a thing? So I might judge that a certain quiet room is conducive to concentration, but I would want to avoid judging another human being if possible (not knowing what is going on inside their head). Judging a thought/state of mind though - labelling it good or bad, helpful or unhelpful - I'm not sure what that would mean - it seems to personify the thought as if it was an independent being not just the result of a chain of events that blindly (in a sense) produce it. On the other hand exercising judgement about an action that I might be contemplating would seem to be a very good thing (is this the basis for sila?). I also wonder if for a lay person because we often have to act quickly in everyday life just using the conventional ways of thinking, we could use meditation as the space where we can take things back to where this stuff comes from - and as far as possible see the flux of things as they really are?
The trouble is I just see more and more complex questions appearing if I try to logically look at all this - and then find a quiet relief by just watching the breath and seeing what being alive is!
Many thanks again
Just to add:
The Blessed One said, "Monks, Sariputta is wise, of great discernment, deep discernment, wide... joyous... rapid... quick... penetrating discernment. For half a month, Sariputta clearly saw insight into mental qualities one after another. This is what occurred to Sariputta through insight into mental qualities one after another:
"There was the case where Sariputta — quite secluded from sensuality, secluded from unskillful qualities — entered & remained in the first jhana: rapture & pleasure born of seclusion, accompanied by directed thought & evaluation. Whatever qualities there are in the first jhana — directed thought, evaluation, rapture, pleasure, singleness of mind, contact, feeling, perception, intention, consciousness, desire, decision, persistence, mindfulness, equanimity, & attention — he ferreted them out one after another. Known to him they arose, known to him they remained, known to him they subsided. He discerned, 'So this is how these qualities, not having been, come into play. Having been, they vanish.' He remained unattracted & unrepelled with regard to those qualities, independent, detached, released, dissociated, with an awareness rid of barriers. He discerned that 'There is a further escape,' and pursuing it there really was for him.
MN111 Anupada Sutta (http://www.accesstoinsight.org/tipitaka ... .html#fn-2)
So discernment is good judgement of value or quality (Wikipedia) - not to condemn I think, but to make wise choices.
I would conclude that this type of judgement must be beneficial!