God created in man something that can demostrate his fantastic glory. All of creation (apart from mankind) is glorious. However, trees, rocks and base animals, fall short of the ability to recognize and appreciate God's creative skills, and worship Him as He, the Artist desires and deserves.
Man was created so that he could do this and worship his creator.
However, Man must have the ability to reject God. If he lacks this ability, he is just another rock, tree, base animal.
God foreknew that man would reject Him and without the threat of the waterfall of eternal damnation, mankind would continue to ignore and reject God.
God also planned for the death of His Son on the cross for mankind's redemption - an even weightier reason for mankind to appreciate and worship Him.
But he did not know if that cross would save anyone did he?
I believe the entire universe demonstrates what God can do. Why would God require/need recognition or appreciation? This seems to me, to be a very human trait.
I don't believe that man has to have the ability to reject or accept God, but I can understand, that in order to believe as you do, one must think that.
As you say, God knew man would reject Him, so why punish someone, for doing something that you, ultimately are responsible for?
Since we are also animals, everyone dies, it's the way we are designed.