I'm gonna reference the Philosopher's Fallacy here, because even though it originally applied only to questions of individuality and self awareness, it's relatively applicable.
The concepts of good and evil are human creations. They don't exist. But enough semantics. As a devout Agnostic, I can say that the POE is a completely useless tool in the atheists debating arsenal against theists. As I understand it, (and I could be totally wrong here), the Atheist POE argument centers around the idea that in a universe governed by an omnipotent, loving, higher power, there should be no evil, no bad happenings. No pain, no death, no suffering, no loss.
Any competent man of faith would simply reply that God is indeed omnipotent, omniscient, and omnibenevolent (which isn't even a word), but he's also Holy. Literally translated, Holy means self restraining. God created the universe, created the beings in it, and created a set of laws to govern in it. Then, in his infinite wisdom, he recognized that anywhere with multiple beings in possession of free will, there will be a certain amount of conflict. And, because he's holy, and he created the world to exist, not to be incessantly interfered with by it's creator, he allows bad things to happen. Well, not so much allow as restrains himself from stopping them.