There is a difference between a disinterested observer as in your example, and the Being that created the whole system that results in people certainly going to Hell, especially when most traditional Christian sects believe that the number of people going to Hell will far outnumber those going to Heaven.
My example was about whether there was a logical conflict between free will and determinism. The differences you bring up seem to be orthogonal to that point. For the sake of argument lets say that God is horribly unfair and sadistic and only created the world to get some kind of pleasure in the eternal torment of many souls. That might be the grounds for arguing against Christianity which supposes God is good and so forth. However it seems unrelated to the question as to whether there is a logical conflict between free will and determinism.