It would be bad if everyone was scared to hell by a god just standing their to be good because then everyone would be the same. Freewill and Freedom is the greatest gift we have. It lets us live our lives as ourselves, so that we are all different intersting people, instead of being billions of nearly identical clones who just look different.
This would be espiecally true if God is truley omnipotent. I like to think he's not because I don't want to think someone is always looking at me when i'm going to the bathroom, and other private moments as such.
At the end of the day, if there is an all powerful god he gives us a chance to go out and live on our own and be our own people. (Well except for the evangelists apparently.)
Sure you can say if he's omnipotent "He knows some of us are going to fail and is an ass."
But haven't you ever let your friends do something you know they shouldn't just because it's their choice? You spoke your few words, then let them be.
