"And it came to pass when ye heard the voice of the midst of the darkness, while the mountain did burn with fire, that ye came near to me, even all the heads of your tribes, and your elders. And ye said: 'Behold, the Lord our God hath shown us His glory and His greatness, and we have heard His voice out of the midst of the fire. We have seen this day that God doth speak with man and he liveth. Now therefore why should be die? For this great fire will consume us if we heard the voice of the Lord our God any more, then we shall die." (Devarim 5:20-21)
Most of us are familiar with Rashi's take on this statement by Bnei Yisrael right after God has told them the Aseres HaDibros. The impression Rashi brings is that Moshe Rabeinu, a"h, disagreed with this request. Given the chance to hear the laws of God directly from Him as opposed to through an intermediary, our ancestors should have picked the former. By choosing to use Moshe Rabeinu has a go-between implied that they desired a mesaure of distance from God, something he did not think favourably of.
However, the Malbim sees this request in a completely different light. I've noted before that there is an intrinsic problem with God's statement to Moshe back in Shemos: "No man can see Me and live". Superficially it makes sense that God's overwhelming presence would wipe out a frail physical being but on the other hand, He's God. He can certainly adjust things to all a human being to survive the encounter. However I noted that not living doesn't mean a physical death per se but rather an existential one. A person who sees the glory of God would lose his free will. After all, after such an experience there could be no more doubt in a person's heart. How could he sin? How could he do anything other than spend every waking minute serving God directly to the exclusion of all else?
But if there is something that differentiates man from beasts (and Montreal Canadiens fans) it's the concept of free will. Unique amongst the animals, we can distinguish between good and evil and make choices, both proper and improper ones. Free will is what makes us human, as it were. Without it we cease to be men and become angels trapped in physical bodies. In other words, a man cannot see God and live because, upon seeing Him, he can no longer be considered a man.
The Malbim goes with this idea here and uses the next verse, the one in which God praises them for their request, as proof that this is an important concept. He recalls Chazal stating that when the Ten Commandments were given our ancestors rose to the level of angels. The Angel of Death lost his power over them and their yezter horo was destroyed.
Again, on the surface this may sound like a great thing. Certainly the pious of our nation spend their entire lives trying to reach that level. But is that what God really wants?
It would appear that the anwer is no. In fact what God wants is human beings, with all their frailties and temptations, to serve Him in this world, not earthbound angels. Had our ancestors remained at their exalted level then the point of creation, the forming of a nation in this world to serve God through the performance of his mitzvos would have been thwarted. It was therefore necessary for Bnei Yisrael to retreat from that level which they did by asking to have Moshe Rabeinu act as an intermediary.
This is why God praises their request, because they sought to fulfill His will in this world in the manner which He showed preference. Therefore it was a positive thing worthy of praise.