A Problem with God's Omniscience

This is just a simple post, but profound when we're discussing a benevolent god.  I really can't fathom how it never bothered me much when I was living as a Christian.  

This issue has been dealt with many, many times, but it's nice to put it in my own words and express my own bewilderment and thoughts.

The crux of the  issue lies in the omniscient god of the Bible creating life with the full foreknowledge that his creation will be destroyed and ultimately cast into an eternal inferno.  If indeed Yahweh is omniscient, he could easily eliminate this issue by not creating those that will ultimately fail to obey and believe in him.  Instead, in an incomprehensible fashion, he goes ahead and creates those who will ultimately inherit eternal punishment.

Let's just look at the world wide flood.  Every single living being with the exclusion of Noah and his family is now roasting in hell, forever separated from god's love (or anyone else's for that matter).  Is there any reason why a loving god would allow this?  How about a just god?  Would a just god create beings that he already knew would fail?  Rhetorically speaking, is god not promulgating a greater injustice by setting people up for inevitable failure to begin with?  

Perhaps, god isn't omniscient after all.  This places problematic limitations on god and appears to contradict Biblical passages proclaiming his seeming omniscience:  1 John 3:19-20

By this we shall know that we are of the truth and reassure our heart before him; for whenever our heart condemns us, God is greater than our heart, and he knows everything.

Everything?  He knows everything yet he creates those that he knows will betray him and inherit eternal punishment.  I have a real problem with this and wonder how Christians reconcile it when made privy to it.  I never paid much attention to the dilemma as a Christian, and I suspect many just avoid it altogether.