The crisis encountered at the end of Section Four (how can knowledge of knowledge have any effect on specific knowledge and specific benefits?) begins here to destroy the inquiry at every turn. Socrates seemed to have reached a promising (though undeveloped) stop-gap at the end of Section Five: knowledge of knowledge does not yield concrete benefits directly, but acts as a sort of guiding force facilitating "inquiry" into specific, concrete issues.
But Socrates seems unable to accept this. His reasons for switching almost immediately from the suggestion that he and Critias have been asking too much of wisdom to the suggestion that they have been on the wrong track are unclear, mired in layers of directionless argument, repetition, and even a "dream." At the beginning of this section, Socrates simply says that he is unconvinced that any "benefit" would really derive from the rule of temperance (knowledge of knowledge) over the state. But he is not using any adjusted, less idealistic version of the definition of temperance. This means that he is saying nothing he did not already just say about the apparent impossibility of the perfect state, ruled by self-knowledge. The transition, then, is unclear, and the argument seems to become adrift in perplexity.
Things do not improve when Socrates makes his next step depend on recourse to a sort of daydream, again about the ideal state (thus marking a further repetition of the same argument). The first new thing we are given to consider is the term "happiness"; Socrates's anxiety is simply that even the most perfect image of the wisdom-governed state fails to convince him that people would go around happy. In a sense, this anxiety is remarkable and touching, considering Plato's later argument, in the Republic, that just such a state would yield universal happiness (the way that a self-knowing, temperate soul will yield a happy person). In another sense, such anxiety is puzzling: coming seemingly from nowhere, and seemingly dismissing the whole set of terminology constructed thus far, it simply launches the foundering dialogue, with a jerky start, toward further confusion.
In the rest of the muddled argument, the sticking point is always essentially the same—nothing about the generalized idea of knowledge about knowledge seems to connect to the concrete benefits that make us happy. Getting nowhere on this point, Socrates finally gives up, both on the specific aim of showing how temperance as self-knowledge can be useful and on the whole project of defining temperance.
The final paragraphs of the dialogue are fascinating and mysterious, a rapid shift triggered largely by the newly affirmed presence of Charmides. Despite the failure of the argument, Charmides is "charmed" enough to forget about the mystical Thracian cure and simply come every day to learn from Socrates. This result is notable along two lines: with the return of desire into a dying argument we get a sense that what really matters in this whole process is not knowledge but successful wooing; and it suggests, in Charmides's being won over by the failed argument, that the process of argument is the key both to knowledge and to love. Charmides renews the whole of philosophy at this moment of failure: he will be Socrates's student, and the two will pursue temperance together.
The ending, however, is slightly darker and more perplexing than this. Along with issues of love, issues of dominance return to the fore in a profoundly unsettled way. Charmides dominated Socrates at the beginning of the dialogue, and was then dominated by Socrates. Here, at the end, he is almost made into Socrates's servant, swearing, at Critias's urging, to follow and obey him. But, in the last few lines, there is a further twist, a dialogue that seems to condense all the mystery of personal relations that underlie the pure union of souls (now broken) that philosophical dialogue is supposed to effect. The playful conceit has to do with political conspiracy and coup d'etat, but also references Socrates's own eventual death at the hands of a hostile court. At the same time, this reads fittingly as a flirtation in the text as well.