Red, my friend, isn't this the whole point of the great controversy???
If God had just snapped a finger that Satan is wiped out of memory which He has the power to do, how would the rest of the universe think?
Would they obey God out of love or fear???
The angels had no concept of sin and death. A third of angels stood with Lucifer. The rest though loyal to God I suspect could have been sympathetic to Lucifer. When Christ's death on the cross, the character of Lucifer was fully revealed and understood by the spectators.
That's why God has allowed sin to play out its course. It's because of God's mercy that ultimately we all choose whom to serve by our full understanding of the consequence of sin.
"And every creature which is in heaven, and on the earth, and under the earth, and such as are in the sea, and all that are in them, heard I saying, Blessing, and honor, and glory, and power, be unto Him that sitteth upon the throne, and unto the Lamb for ever and ever." Revelation 5:13.
[FONT=Arial, Helvetica, sans-serif]The great controversy is ended. Sin and sinners are no more. The entire universe is clean. One pulse of harmony and gladness beats through the vast creation. From Him who created all, flow life and light and gladness, throughout the realms of illimitable space. From the minutest atom to the greatest world, all things, animate and inanimate, in their unshadowed beauty and perfect joy, declare that God is love. [/FONT]-GC p679