Yes we could not be wise. But we wouldn't. As I said, God is free, yet he does only good things, and could be evil if he wanted. Look at the world around us: all the virtuous people that know God exists and is good, they all do good things everytime it's in their power. They could do evil things, but it wouldn't be good. Do they chose not to ? If you argue yes, then freedom can be attained without evil, were we all made virtuous.
Your last conclusion is what I'm trying to explain actually. It's impossible. God has no reason, being good, to create a universe where it is impossible for perfect beings to emerge without evil. Thus this imperfect universe cannot be the creation of a benevolent, omnipotent, omniscient and perfect God - and this is what the problem of evil is about.
Puck, again you're kind of right, but I'm trying to see it from the religious point-of-view. What you said about pain can be applied to all emotions and sensations. One could argue that everything we are is chemistry and physics, even down to the consciousness itself. But if God exists, we've got a value beyond all that, because we've got souls and He loves us and we love Him, and sadness is actually a bad thing and happiness is actually a good one because He watches us and listens to us. God makes everything valuable and meaningful, that's why the idea is so popular. I doubt my vision of the "average" or "official" christian point-of-view is wrong, but feel free to correct me if it is.