I think we err if imagine "Heaven" and "Hell" in quasi-karmic terms of reward and punishment. Hell isn't an eternal punishment because each and every sin has an eternal effect, and therefore in order to balance the scales Hell is necessary as punishment to counterbalance sin.
In Christ God is restoring, reconciling, and redeeming the world. It is God's purposes in Jesus to take the whole of creation and bring it back into good order, for this reason He makes all things new. That new creation in Christ is ours, by faith, made tangible in the resurrection on the last day when we are restored to bodily life and glorified in the image of the risen Lord Jesus Christ. In order to share in the life of the world to come. That is what God is doing and will do in Jesus. But Scripture is clear that there are those who do not participate in that, do not have a share in that future redemptive reality; for whom sin and death remain their reality--St. John in the Apocalypse describes this in the most graphic way possible as a lake of fire and sulfur, calling it "second death".
Hell, in that sense, is not karmic retribution for sin; but the tragic reality of sin and death still in those who refuse to share in the life and beauty of the future age.
-CryptoLutheran
