I understand your question and why you raise it in such a heartfelt, eloquent, and elegant manner. My answer is, no, God is not wrong in having set up this system. The soul always has the option of not reincarnating, it is never forced. No soul is ever compelled to reincarnate. This quote from my lead not incarnated (lest anyone think I mean some human "guru") spirit guide, Rama, is found in several of my essays (this is the best organized and most complete one https://medium.com/illumination-curated/my-understanding-of-god-life-death-and-the-between-lives-we-experience-with-our-many-soulmates-af641080747f):

"When you return to source/heaven/god after every lifetime, you will be given a choice to stay in that realm that you are put in or to go back to the master class [Earth] to attain a higher level. You can make the decision to return to the master class at any time. If you choose to go back to earth, it would be for the specific requirement to have the goal of growing your soul to get to the next level, only you are not consciously aware of it once you incarnate."

Anneliese, not only from my present life but also with some knowledge of the facts of a few of my prior lives, I understand and empathize with your struggle and the question you explore today. A couple of years ago I wrote a sonnet, https://medium.com/promptly-written/of-lifecycles-and-tragedies-be4d0890fd0d, my first actually, that had this as the second stanza,

Each script is a bittersweet symphony

Whether Greek or Shakespearean drama

Lessons rise from ashes of tragedy

Is suffering worth gaining nirvana?

and this as the concluding couplet,

As the adage says no gain without pain

How many rebirths can phoenix sustain?

The next day I wrote this essay, https://medium.com/illumination/god-loves-us-unconditionally-45c54c297e52, about a channeled by Anne, the psychic medium who has earned my trust over 14 years of working together, discussion with my guides and Sitara, the soul of my dearly departed lover, Lindsey.

"Sitara and Anne had spent an hour before we got on the phone discussing reincarnation and soul contracts....Sitara had said to Ane that God signs off on the scripts to try and make sure that a soul does not take on more than it can handle, but sometimes the soul does get overwhelmed. I know this sometimes leads to suicide attempts. I also know sometimes it leads to a soul being granted an early exit if a walk-in can be arranged.

I texted Ane after the call:

'You asked in the conversation if that means God can be wrong. There is no right or wrong. God cannot predict the future. That would eliminate free will from the equation. If God allows a script that ends up being too much for the soul, that doesn’t mean God was wrong — it simply means the soul didn’t rise to the potential that God saw as possible.'

So, again, God is as spiritually intelligent as anyone can possibly be but [from my POV in this reality], not omniscient."