I heard an interview once with Rabbi Kushner (the author of When Bad Things Happen to Good People), I think it was on NPR's Fresh Air with Terry Gross. He made a very remarkable statement.
You see, tragically, his son was born with an incurable and fatal disease. He watched the son, whom he loved dearly, suffer and slowly die. At this juncture, he began to wrestle with God. Then he said he came to a very logical point of divergence. He knew that God could not be both omnipotent and loving so he would have to choose. He said, like most people, he preferred a loving God when given that choice. So his conclusion was that God does love us, but He can not cure cancer or reverse the laws of physics or other natural processes.
Evangelicalism still holds firmly to both characters of God, plus, that God does micromanage all parts of life. So, not only can God cure cancer, but you can not even get cancer unless God wills it or plans it. But still, defying logic (at least on an emotional level) He still loves us tremendously.
I do think that there is another option. Maybe some of the intellectuals and well read people who visit here (and I mean this in the most flattering way) may know of some of the great men and women of the faith (talking about Luther et. al.) who have written about this. In my opinion this topic seems to be missing. I am very familiar with Schaeffer's writings and I don't think he really deals with it carefully.
Here is my view of the matter. God is loving as the New Testament describes Him. He is also Omnipotent. He has to be or he can not be the creator of the universe. Anything less and we are left with the gods of the Greeks. However, I don't see Him as the micro-manager. Scripture is clear that we live in a fallen world. One of the most theological sound-bites I've ever heard was simply . . . "shit happens." God doesn't shit on you. You do not have to create your on shit. But, we live in the fall out of the consequences of sin (others and our own). God could erase all the bad stuff, so it is not an issue of power. But, in my opinion, He is patient and is allowing things to take their course. This is some of the mystery. But I do remember Schaeffer saying that Christianity, if understood right, is the only religious system that allows you to hate evil without hating God.
So, in Joe and Karen's case, a % of men are pedophiles. And % of the pedophiles choose to live a double life. Karen just happened to be caught up in that percentage. God didn't do it to her. She didn't fail in her approach to making the decision, but shit happened. In her case, it was terrible shit. I was good friends with Joe and I never, ever saw it coming. Mostly because I believed that all Christians were above such darkness.