It's really not that hard a question to answer. Human beings were created with free-will in mind. I think God knew that we were going to abuse this gift but still created us anyway. That's God's love - because he went ahead of us with the Christ.
Evil entered the world because of mankind's choice to disobey God. It wasn't that the creation was imperfect, it's that we capable of disobeying God. We aren't God, so we don't have the same inherent, unchanging Holiness that He has. Our holiness comes from Him.
Really the existence of evil shows more about the difference between man (covets the throne, easily goes back on his word) and God (owns the throne, never goes back on His word) more than it does the "imperfection" of creation.
Yes, I agree free will is what made sin a possibility-and that God desired that we have that gift in spite of the potential for evil that can come of it. The question remains, though, why would God's good creation-humankind- choose to abuse that freedom and sin? And the only answer that comes up for me is that part of His creative process isn't finished-He's molding us, educating us, having us be co-creators, if you will, participants in bringing about a greater creation precisely
because of that free will-because He wants, ultimately, a creation that freely chooses only the good, rejecting the evil. And part of that process, with all the suffering and struggle it involves, is for us to experience-to
know-good and evil, so we might finally, fully, like the Prodigal Son, return from the pigsty to the Father from whom we strayed and where we were always meant to be.
Maybe God can't create another god, with wisdom and will as perfect as His, or approximating His, except within the dimension of
time, which affords us the opportunity to work out our salvation, to struggle with the attraction to sin (anything outside His will, anything apart from
Him first and foremost), with the ingredients of revelation and grace playing their roles, so that ultimately He ends up with a creation that chooses life over death, good over evil, God over no God.