"If god (sic) only does good and god is the reason why everything exists, then the existence of everything is good." Why do you think that follows?
Through simple logic.
OK. Please demonstrate it.
I'll put it alongside another argument that uses the same valid form:
1 Everything that begins to exist has a cause.
2 Everything god does is good.
3 The universe began to exist.
4 Everything exists because of god.
Therefore:
5 The universe has a cause.
6 Everything that exists is good.
Like I said - simple.
Good question. BTW, your premises and conclusions don't follow necessarily. I've numbered them for easy reference. 1, 2, 3, and 5 look OK to me. 4 should be "Everything in the universe exists because of God." Let's make that 4'
4' Everything in the universe exists because of God.
6 therefore becomes
6' Everything that exists in the universe is good.
Now there is a difference between physical stuff existing and sin. Sin is a concept, an attitude of mind. You can't point to it and say, "There's some sin. I'll have a couple of kilos, please?"
Therefore, I don't think your conclusion holds.
A more fundamental question is, I would suggest, whether an all-powerful God can actually give creatures any independence, e.g. free will in any meaningful sense. We could argue that an all-powerful/omnipotent God can do anything, which means a creature is totally stuck with what God wants to happen. Alternatively, if God is all-powerful/omnipotent it would mean he, by definition, can give independence to a creature.
Yes, evil exists because God gave creatures the ability to do evil. Yes, he knew what would happen. Yes, the good coming from it is worth the evil. There is a heck of a lot of evil in the world, so, yes, the good to come from it is going to be absolutely wonderful.