Thanks for the detailed response. I'd be happy to discuss Molinism over a beer (or, it sounds like, quite a few beers 
) at some point should the opportunity ever arise. Likewise, if you are aware of any good links or even books on it, I might just put it on my reading list. I don't necessarily want to go TOO deep, but as you can tell I'm interested in the philosophical aspects of this.
One of the difficulties between foreknowledge and causation as it relates to free will is that God, theoretically, could have created a universe in many different ways. He set the initial conditions and could have run his computer "God-simulation" program to identify all the different ways that the universe could have developed. So even if it's true that there is some way to square the circle of his foreknowledge such that I have the free will not to believe in his existence, my contention would be the HE also had the ability to create a universe in which I never existed. Would it not be cruel to create a universe in which I'd freely not believe in him and punish me for it, if he could have created a universe in which I never existed and never have to punish me at all?
I recently got a pretty short book on Molinism by a philosopher who's written many books I own. He's brilliant and clear in his writing, so I expect it's good, but I won't recommend it just yet because I still haven't read it. There is a lecture on YouTube that's about an hour, of him explaining the position which is a pretty good run-down. I can't look for it at work but I'll check later and send you the link if I can still find it.
With the second paragraph, you've butted up against the broader subject of God's moral perfection. Man, there's so much there.....let me see how much nothing I can do while I pretend to work. Again, good job on the question in the first place. I don't think most people ever think that hard about it.
The most basic element of this discussion would be the proposition that God is what he is, not what we think he is or what we want him to be. You'd think that'd be uncontroversial but it's amazing how much that idea is not adhered to and trips up opinions. So many objections against God are effectively straw men that people erect based on assigning him incorrect or inadequate qualities compared to his actual nature, knock down said straw men, and then say "Look, your God doesn't pass this test as expected." When the reality is, no, we don't get to make stuff up willy-nilly about the Christian God and charge him with no evidence when he fails to meet an arbitrary standard. Christianity makes a basic set of claims about God which I won't detail here, and which, according our own belief system, we did not make up but rather these are attributes which God himself revealed in one way or another. So to start with, we have to consider God on his terms, not ours.
I mention this because one proposed answer to what you're talking about is to first consider the definition of omnipotence. Christian belief has historically held that none of God's characteristics can violate any other of his characteristics. In fact, most schools of thought have held to the idea of Divine Simplicity--of which there are many versions--which is just the idea that God is not made up of parts, and so his characteristics are not separable in some ways (there is definite variation in how far to take that idea, and it gets so philosophically complex that my head explodes....I'm learning, but I'm not all the way there yet with that one). All this means God's omnipotence can't be divorced from other characteristics, one of which is the idea that logic and reason are grounded ontologically in his nature. So when we say God is omnipotent, that actually has a limitation of only being able to do what is logically possible. i.e., can God make a square circle? No. Can he make a married bachelor? No. If someone wanted to say God should be able to do those things or else it's not omnipotence, fine, but if he can do the logically impossible, then he can both exist and not exist, or do any horrible thing imaginable no matter what and yet also be perfectly moral. Because, once logic goes.....why not?
See Alvin Plantinga's work (just to name one prominent philosopher) which expounds that notion and critiques the idea God could make
any world. Rather, his omnipotence allows him to make any world that's logically possible.
But wait, there's also his moral perfection. God is "bound," in a sense, to act only according to his nature. I think the idea here is anything else would be a logical contradiction. (And if you really want your head to explode, look into the literature on whether or not
God actually has free will.) But at least potentially, God is obligated by his own nature to create the best possible world which he logically could create. On the surface, that's a harrowing idea. This? This place? Out of the gazillions of worlds he could create, he picked this one? With all the pain, suffering, misery, spite, war, hunger, and flat-out evil? We're supposed to believe this is the best he could do?
Now we've wandered off into the objection for the existence of God due to the problem of evil and suffering, which I won't get into too deeply here, but as briefly as I can, I'll say philosophers have broadly divided it into two categories: The logical problem of suffering, and the probabilistic problem of suffering. The answer to the former is actually relatively simple and has widespread agreement amongst philosophers that it fails to disprove God's existence. The reason being that they recognize that if there is even any
possibility that God could have morally sufficient reasons for allowing the evil and suffering that he does, then the objection fails. Does he have morally sufficient reasons? Well, that's irrelevant, as long as it's even possible. And the burden of proof placed on the detractor to show that God could not have morally sufficient reasons for allowing this much evil and suffering is obviously so high than it cannot be met. That is, as I say, widely recognized, and uncontroversial. The latter I won't get into because it doesn't exactly apply to your question. I'll only mention quickly that due to the widely agreed-upon recognition of the failure of the logical problem of suffering, most atheist philosophers retreat to some version of the probabilistic version (and I'll note that, for example, when OAM voices his objections to the idea of God regarding evil/suffering/crap, he's giving various examples of the probabilistic problem of suffering).
The importance of recognizing how the logical problem of evil and suffering fails is in the understanding that God
could have morally sufficient reasons for having created
this world. We don't have the perfect moral scales, by which I mean, for example, what's more "good".....helping an old lady across the street, or helping a kid who fell down on the sidewalk and scraped his knee? I'm sure that's not a good example, but hopefully you get what I'm saying. Suppose you can only do one of those things. Which is "better?" Heck if I know. The greatest amount of good is hard to know even when we clearly understand limited alternatives. Imagine the actual world, with quintillions of decisions having been made, producing outcomes, for however long we've been here. Then add on top of that, we don't know the counterfactuals. We don't know what would happen in the overall arc of history if people chose differently than they did. (This is where Molinism comes in, which posits the idea of God's "Middle Knowledge" as part of his omniscience.)
At this point, if you're still with me, you might be saying "Ok, but you haven't proven any of that." True, I haven't, and I haven't intended to. I went through all that to hopefully show there is coherence to the idea that God
may in fact produce the best possible world, and that we are in no position to say this isn't it. Love, for example, has often been held up as one of the greatest goods, if not
the greatest. How many loving acts does it take to justify the amount of crap in the world? Well, I'd argue that to know that, we'd have to understand the moral scales, which we don't. I don't know how much suffering is worth the good the history of the world has seen. What I do know is that it's at least plausible that God wants the best possible world, and that he created it.
How does that answer your question about God creating people he knows will reject him? Well, assuming there's no incoherence between his sovereignty and our free will (Molinism gets my vote, but there are other options), then if people freely reject him, he's not morally culpable for whatever consequences they incur. And while he may foreknow their free choice, he can be justified in creating them anyway if their free choices in the world contribute to the greatest amount of possible good. Which is to say, to answer your question directly about why not create a world where an unbeliever is never born? Because it's not just about them. Their actions and presence in the world may bring about circumstances and conditions that cause the overall arc of history of free creatures to be the best it could be. They had free will. They used it. God had a world to bring about. He used them.
Is that how it is? I don't know. I suspect it's something like that. But I'd note this all comes strictly from philosophy, and is not taught in any texts Christians consider sacred or divinely inspired. The important thing there is, it doesn't contradict those writings either.
This was hella-long and I don't know if I do a good job of staying on topic when I do this. It's hard to type that much and not lose sight of the original question I'm trying to answer. And, if on a first consideration, you looked at it and said "that sounds like a buncha bullshit," I confess I wouldn't blame you. I'm not sure what it would look like to me if I weren't a Christian. And even for me, the first time I realized that maybe this world is actually the one God wanted, it just about made me turn white and faint. I think it did not square with what I thought about God, but back then, I confess I knew so very little about theology, or had read any great philosophers or theologians, which is back to my first point. I was still trying to fit things into what I thought about God, not looking for what he actually is and going from there. I also realize it may strike you as immoral. I think.....I get that impulse....even if I ultimately don't agree with it. It certainly doesn't
feel good to say God wanted this exact world, or that he created people he knew would reject him. But two things: 1) this is just one solution to the question you asked. There are others. This just happens to be the solution that makes the most sense out of the nature of God as I understand it. 2) The distinction to remember, even if it doesn't convince you, is that it's not that God wanted the amount of crap we have or people to not believe in him, per se, it's that the crap and the people were necessary to bring about the best possible world.....and that a world where free creatures do good in ways we can't measure, and then go on to live in an eternity of undefiled good with him and each other, is totally worth it, if we could just see the infinite picture with our finite minds.
