Wasn't Peter just trying to avoid getting caught when he denied Jesus three times? Simon Peter's denial of Jesus is seen as a horrible sin, but it seems to me that it wasn't that bad; Peter was among enemies and they surely would have taken Peter or sent him out if they found out he was Jesus' disciple. So why was Peter's denial of Jesus so bad given that Peter couldn't tell them the truth if he wanted to stay and see what happens with Jesus?
Reading related passages helps to understand Scripture; the sin was pride.

Peter's denying Jesus is set up by something that happened previous to that infamous denial during Jesus' night time interrogation. From the book of Matthew (26: 31-35):   


  31  Then Jesus said to them, "This night all of you will have your
  faith in me shaken, for it is written: 'I will strike the shepherd,
  and the sheep of the flock will be dispersed'; 32  but after I have
  been raised up, I shall go before you to Galilee."  33  Peter said
  to him in reply, "Though all may have their faith in you shaken, mine
  will never be."  34  Jesus said to him, "Amen, I say to you, this
  very night before the cock crows, you will deny me three times."   35
  Peter said to him, "Even though I should have to die with you, I will not deny you." And all the disciples spoke likewise.  


Peter talked a good game.  He boasted of his faith and love for Jesus.  And when it came to crunch time, he could not back up his words.
(Matthew, 26: 72-75)   


  72  Again he denied it with an oath, "I do not know the man!" 73  A little later the bystanders came over and said to Peter, "Surely
  you too are one of them; even your speech gives you away."  74  At
  that he began to curse and to swear, "I do not know the man." And
  immediately a cock crowed. 75  Then Peter remembered the word that
  Jesus had spoken: "Before the cock crows you will deny me three
  times." He went out and began to weep bitterly.  


Peter's sin was the sin of pride, as evidenced by his boasting to Jesus and the other disciples present.      

Whether or not it was "some great sin" to react with fear, Peter's boast demonstrates the hazards of pride, and the other matter of walking the walk versus talking the talk.  While I've generally heard it taught (by clergy in various denominations) that this was a case of Peter's faith being put to the test -- as any of us can be presented with a test of faith -- there are many lessons to learn from this.  

Pride goeth before a fall 1

One lesson is: don't write checks with your words that your faith can't cash.  

Lesson two: don't boast

As the Apostle Paul cautions us: don't be boastful.  Peter was boasting about how strong his faith was when he'd no idea what test his faith was about to be presented with.  Jesus knew.
1 Corinthians 1: 27-31  


  27 Rather, God chose the foolish of the world to shame the wise, and
  God chose the weak of the world to shame the strong, 28 and God chose
  the lowly and despised of the world, those who count for nothing, to
  reduce to nothing those who are something, 29 so that no human being
  might boast before God. 30  It is due to him that you are in Christ
  Jesus, who became for us wisdom from God, as well as righteousness,
  sanctification, and redemption, 31 so that, as it is written, "Whoever
  boasts, should boast in the Lord." 


Peter was boasting in Peter, not the Lord, and so had a fall.  



1 A slight misquote of Proverbs 16:18  


  Pride goeth before destruction, and an haughty spirit before a fall