The response to the idea that God must be evil since evil exists is that human and created beings such as Satan have free will. Without the ability to rebel there is no free will and we would not be in the image of God but would be puppets on God’s strings. Christian theology generally conceives of Adam and Eve as without a “sin nature,” they had no compulsion to sin as we do, but rather chose to do so without any innate drive, and this choice introduced sin and its consequences into the world.
I don’t think it can be viewed as “a mistake” knowing that God is omniscient. Leibniz believed that God solved creation as a minimum problem, that this creation is the “best of all possible worlds.” Any other choices would have introduced more evil rather than less.
How would people gain character if they were not tested? Satan means “tempter.” Would a world without temptation be a better world for God’s purposes? When you defeat an enemy and gain strength of character in so doing, have you lost by the struggle? Would you really choose to be created without struggle and without free choice to disobey God; to have the end be the beginning and never know pain? I don’t think I would. It is prideful perhaps to like this life and see value in becoming rather than just being . . . but it’s how I feel.
The idea that free will and sin create the conditions for the ‘building of character’ is a pretty strong argument. Yet it doesn’t answer the question of why evil has to exist. Like someone said earlier, free will could still exist without evil or sin, you’d have a series of choices that led to different results, which could even be destructive (which is not necessarily sinful - creation implies destruction or reformation)...but the absence of a sinful nature would allow us to avoid ‘sinful’ reactions and feelings related to our decisions. The whole idea of sin seems self-referential...’it exists so that God can get rid of it in X thousand years’. Will it happen again? Will we become robots without free-will in heaven?
I did not accuse God of being evil. He must be imperfect, if he is to be a non-contradictory Christian God, and if perfection implies the intolerance of evil. I’m willing to entertain the idea that God’s moral calculus is way beyond anything we can comprehend, but I don’t like people telling me the secret to it all is as simple as basic arithmetic...because when you do the actual math, it doesn’t compute.