By adding insulation inside your basement wall, you are not blocking the insulation properties the soil has. You are adding to the insulation the soil provides you with.
What you are blocking is the ability to use the soil as thermal mass that will absorb heat from your basement when it's hot and release some when the basement is cool. This only really works down through the basement floor where the stored heat is captured much better than to the sides.
Uninsulated basement walls will make your basement feel very cold even if you heat the air, and you will have problems with condensation.
- Even below the frost line, your soil is still very cold. It will probably be in the forties, and since your concrete basement wall does not insulate, the inside surface of the uninsulated basement wall will not be much warmer than this.
- Since your body feels temperature roughly as 50% air temperature and 50% radiant temperature (the surface temperature of all the surfaces surrounding you), it will still feel very cold in your basement even if you heat the air to seventy degrees.
- Another problem will be condensation. The humidity in the air will condense on the cold walls, in your case hidden by the studs and the gypboard that you are facing it with, and it will mold. So proper insulation and a vapor barrier are strongly recommended.
So please insulate the walls entirely and add a vapor barrier for anenergy efficient home.
For more information:
Read Mike Binder's Q&A "How far below grade should I insulate my house's exterior? What material should I use?"