But God cannot know that Its knowledge is so perfect.
Would it be more evil for God to assume It has perfect knowledge and only create heaven-bound folk, thus denying the potential to prove It wrong to all the folk it thinks will be hell-bound; or, for God to simply create all creatures it plans on creating without respect to whether or not It thinks they will be hell- or heaven-bound?
Since 'good' and 'evil' are relative terms that only have meaning to moralistic individuals—and for humans are even different from one person to the next—, I think it is not likely you can define 'God' in such a way that It won't be found evil by someone.
You think Phat's God is evil. Phat thinks your God is heartless.
If those christians who believe that God desires a sort of spiritual communion with us are correct, it would follow that such a God should not interfere with the outcome of human lives through the action of creation...specifically creative foreknowledge.
Do you believe God desires a 'sort of spiritual communion'?
To be fair to free will, however, humans would also have to have a decision to reject Gods offer of communion.
Before we can choose to accept or reject the communion, we have to be able to know what it is that's trying to commune with us.