In my church we believe that Joseph Smith was called as a great prophet of the latter days. We believe that he received revelations from God and that in those revelations we learn eternal truths that teach against the philosophical argument known as The Problem of Evil. Here are some of those teachings:
Doctrine and Covenants 93:29
29 Man was also in the beginning with God. Intelligence, or the light of truth, was not created or made, neither indeed can be.
This verse teaches us that there is something that God himself is telling us that he cannot do. He is telling us that there is a part of man known as his intelligence which was never created or made and that it cannot be created, not even by God. In other words there is a self-existent part of mankind that has always existed and was not created out of nothing by God.
In Joseph Smith's translation of the Book of Abraham, we learn this same concept from Abraham.
Abraham 3:18
18 Howbeit that he made the greater star; as, also, if there be two spirits, and one shall be more intelligent than the other, yet these two spirits, notwithstanding one is more intelligent than the other, have no beginning; they existed before, they shall have no end, they shall exist after, for they are gnolaum, or eternal.
From these verses we learn that there are limits to what God can do. God cannot create something that in itself is self-existent because it has always existed. A part of mankind known as his intelligence is self-existent and exists in the state that it exists in outside of the creation of God. If these intelligences have not achieved a state of goodness like God, and cannot be created to be like God, then God would have to teach them to be more good. So these concepts take away the notion that God could have created us to be perfect like himself. Since a part of man is self-existent, God could not create us to anything outside of what we already were.
2 Nephi 2:11
11 For it must needs be, that there is an opposition in all things. If not so, my firstborn in the wilderness, righteousness could not be brought to pass, neither wickedness, neither holiness nor misery, neither good nor bad. Wherefore, all things must needs be a compound in one; wherefore, if it should be one body it must needs remain as dead, having no life neither death, nor corruption nor incorruption, happiness nor misery, neither sense nor insensibility.
This verse tells us that there must be opposition in all things. For there to be righteousness, there must be wickedness. For there to be good there must be bad. For there to be life there must be death. For there to be incorruption there must be corruption. For there to be happiness there must be unhappiness or misery. If there was not opposition in all things, then there would be no distinguishing of what is good or bad but would remain as void. So God is telling us that there is a need for opposition in order to have goodness and happiness. So the concept of doing away with evil would do away with goodness. For this reason we don't believe that God would want or desire to eliminate opposition in all things.
The Prophet Joseph Smith also taught that the mean of the word, "create" means to organize something out of things that already exist. In other words, he taught that ex nihilo creation does not exist. The intelligence already existed because it was self-existent and we also learn from the revelations that matter or elements are also is self-existent.
Doctrine and Covenants 93:33
33 For man is spirit. The elements are eternal, and spirit and element, inseparably connected, receive a fulness of joy;
So, God does not create elements or our intellgence out of nothing (for more on this see my post
The Problem with Exnihilo Creation). If this be true, God cannot simply create us to be perfect since we are a combination of that which we were organized from, ie self-existent intelligence and matter. We believe that our spirits are a combination of our intelligences and spirit matter.
Doctrine and Covenants 131:7-8
7 There is no such thing as immaterial matter. All
spirit is matter, but it is more fine or pure, and can only be discerned by purer eyes;
8 We cannot see it; but when our bodies are purified we shall see that it is all matter.
So in summary, if our intelligences are self-existent, then God could not create them to be anymore perfect than what they already existed to be. If our intelligences were in a state of imperfection in following goodness, God could not simply make us to be good but needed another way to help us to become good. If opposition in all things is a true principle, we need opposition for goodness, happiness, joy, etc. to exist. Thus doing away with evil would destroy the goodness of God. I believe this mortal life is only temporary and it is calculated to help us learn to become more like God. From learning good and evil, we become more like God.
Genesis 3:22
22 And the Lord God said, Behold, the man is become as one of us, to know good and evil: and now, lest he put forth his hand, and take also of the tree of life, and eat, and live for ever:
Here we see that learning good and evil gets us to become more like God. I think this temporary life is a school of hard knocks that gives us the opportunity to become more like God.