I believe the distance in the narrator is due to the fact that he is unhappy with his life in general, even before he has a crush on Mangan's sister.  The entire story is one that is heavy and dark.  The neighborhood the narrator lives in is dark, unattractive, and stale.  It is an oppressive setting.  Because of this, the narrator is detached from the others in many ways.  

The narrator creates distance between himself and everyone else in the story.  He even creates distance between the object of his affection and himself in that he only ever refers to her as "Mangan's sister."  He does not talk to his friends or his uncle and aunt about his crush.  He is experiencing and analyzing the experience in complete isolation.  Thus, when he comes to the embarassing conclusion that he has been confusing religious ferver with romantic feelings he is unable to distance himself enough from the embarassment of the situation and find anything positive in the experience.  We are left as readers wondering if the narrator has a positive view of either love or religion after the experience.