Man's greatness comes from knowing he is wretched: a tree does not know it is wretched.Cheerful thought! But not a bad one to ponder during Lent.
Thus it is wretched to know that one is wretched, but there is greatness in knowing one is wretched.
For Pascal, "wretchedness" is simply our situation without God, psychologically and morally. It's no fun being in such a state, morally confused and psychologically unwell, but our awareness of this wretchedness is "greatness" as it is a recognition of our longing and need for God. It's the first step back into the wholeness.
It reminds me of an old hymn we used to sing:
I need Thee every hour,
Most gracious Lord;
No tender voice like Thine,
Can peace afford.
I need Thee, O I need Thee,
Every hour I need Thee!
O bless me now, Savior,
I come to Thee.