Why would sinners be put in Hell?

I have been questioned before, why God created Hell and why the Merciful God have to punish people?  

My immediate and official answer is, I don't know, Allaah knows best. Just like how, when the Angels asked Allaah, why He wanted to put human on earth when they would cause mischief and shed blood - Allaah said, "I know what you don't know." Even the Angels don't know everything. 

We humans too, and we definitely are not able to see the total big picture, the total workings of humanity, the world and the universe. We only see miniscule snippets. 

There is a question put forth in the Quran, that I happen to have just reached : "Do those who commit evil deeds really think that We will deal with them in the same way as those who believe and do righteous deeds, that they will be alike in their living and their dying? How badly they judge." 45:21 

Let's just ponder over our current world - this earth - this life. Why do governments create punishments for certain offenders? Should we be kind and put the serial rapist who raped your toddler, the tyrant leader who had your father killed and family starved, the sadistic killer who murdered your sister for no reason, who are all not remorseful - should we put them all in a resort in Maldives? 

 Also, we look at our kind neighbour or the old man who is non-Muslim working hard for a living, and we assume, these are the 'kafirs' whom Allaah will put in Hell? How do you even know that and how can you even assume that? Kafir-ness of a person is something known only to Allaah - being a kafir is something internal. 

Allaah knows best the people deserving of Hell - e.g. one trait Allaah mentions is, the person has been convinced and know the truth, but rebel just because he is arrogant.' Allaah knows best. 

So am I saying the non-Muslims who have not heard the convincing message of Islam and are regular people who does good deed, Allaah will put them in Heaven? Well, Allaah is the Most Merciful and Allaah knows best - I don't know. 

 "Then in this case, I may as well not be a Muslim!" Then, you may fall into the category of a people who is convinced of the truth - however is arrogant and rebellious. Be careful. You don't have to proof anything to anyone - it is between you and Allaah alone. 

 Whoever believes and does good, it's only for his own benefit, and whoever does bad deeds it is to his own detriment. Believe, and be good anyway. May Allaah guide us all.