Well, first off, I will preface this by saying that unless God has directly provided an answer to a question that starts off "Why would God ___?" it is difficult to answer. And he basically answered this question in the book of Job along the lines of, "I couldn't possibly explain to you why I do all the things I do. I'm God and I do what I do for reasons. Understand that you, my creation, won't always understand." That answer may not be intellectually satisfying, but it is the only correct one.
Second, I don't completely understand the correllation between being "loving and caring" on one hand and insulating people from all kinds of bad things on the other. Given that we as humans tend to get comfortable and resist questioning our existence and the meaning of life unless and until our world gets rocked by something, I don't see why we should think that being insulated from all suffering would be a good thing. If we need that kind of thing to grow, it would be unloving to remove what makes us grow.
Third, all that being said, what I do know is this: Pain and suffering are not from God, but God does allow them. On top of what I know in that regard, what I think is that God has a much different perspective on suffering. While it saddens him and it is bad, I think he understands that it isn't as bad as we think it is. I don't mean to minimize any of it, but I think it is a lot like a child going through something that the child from his or her perspective thinks is tragic, while the parent understands that it is something the child must face, can get through, and isn't as bad as the child thinks it is. I also think that if someone is at all inclined to have a relationship with God, suffering in this life has the end result of bringing that person closer to God. And in the end, this life is so short in comparison to eternity, that, as Paul put it, "sufferings of this present time are not worth comparing with the glory that is to be revealed to us." Forgive me if my answer seems trite, or doesn't seem satisfying. It is actually a deep, complex question. I struggle mightily to even comprehend what I think the answer might be. I struggle even more to try to articulate it well, and I fear that despite my best intentions, I probably still haven't done a very good job.