I have always taken this song to be about Jesus's agony in the Garden of Gethsemane when he fearfully prayed while his disciples slept.
The first two stanzas are Jesus wondering about just giving up, not going through with what He knew was coming the next day.
But, the third stanza shows that he realizes what is to be gained if he goes through with it.
He still wants to "let it go, and so fade away...", but, no, He's "wide awake, I'm not sleeping..."