After Ziqi's soliloquy in which he explains how it is that he has lost his 'me', Zhuangzi provides some commentary in which he discusses both the positive and the detrimental consequences of this I-me dualism. He begins by stating what we already suspected, namely that the howling of the trees is analogous to all our human expression — emotional, intellectual and aspirational; they are all "music flowing out of the hollows."
I am not sufficiently well read to say so for sure, but it seems to me that Zhuangzi's descriptions of the human condition as full of angst and futility are remarkable for his time. "Mushrooms of billowing steam!" "An enormous sorrow!" This is how he here describes our 'flourishing'. These are the consequence of our being objects to ourselves. As such "you grind and lacerate yourself against all the things around you. Its activities will be over as quickly as a horse galloping by, unstoppable—is it not sad? All your life you labor, and nothing is achieved." (Ziporyn) If this is the consequence of the I-me dualism, might it not be worth considering an alternative?
Still, nothing is cut and dry: "Without that there would be no me, to be sure, but then again without me there would be nothing selected out from it all." It is because I am able to see myself as an object that things, including me, come to have identity. To even discuss I-me is to have already endorsed it, at least in that it is to have accepted an identity as a value. The question arises, therefore, whether it is possible to have any identity for anything at all without there being an I-me dualism. Can there be a self-identity without a 'me'? Zhuangzi seems to think so, though it is a new kind of identity, an "unfixed identity". As always, nothing is truly negated; somehow the necessary 'me' has been affirmed, yet transcended.
Thus, Ziqi in having lost his 'me-identity' as a isolating and limiting phenomenon, is now able to realize the unity of all things in their equality, yet at the same time . . . experience them. Zhuangzi never declares that 'all things are one' without the assumed qualifier that "not-one is also one", for it only through our being in some sense other than the world that we are able to experience it. There is no abandonment of the 'self', but rather a transformation of the nature of the self, one that enables both distinct individuality and unity.
You can check out Scott's writings on Zhuangzi here.