Does a garment entirely dyed with techeiles still need a single string of techeiles on its tzitzis?
Does a house filled with seforim still need a mezuzah?
According to the Midrash these are the questions Korach used to make his point. Does a people perfect in yirah, represented by the techeiles which alludes to Heaven, and perfect in knowledge of Torah, represented by a house filled with seforim, need a single leader or kohein to rule over them?
R' Tzadok haKohen (Pri Tzadik, Korach 2) explains that Korach's error was not misjudging the level of the people's religiosity -- had there been no truth to his claim that "the entire nation is holy" it would never have been incorporated into the Torah's narrative. Rather, Korach's error was in assuming that this pinnacle of spiritual perfection is a self-sustaining safe landing point after which no further leadership or direction is needed.
Korach's punishment was to descend "chaim she'olah", into the depths of hell while still remaining alive. The lesson: Without leadership establishing safeguards a person can be spiritually "alive", perfected, "bshleimus hakedushah", as R' Tzadok writes, yet still find himself in gehenom.