The questioner seems to be saying that what God should have done is figure out how things were going to go if he proceeded as he wanted to, and then having seen what would take place, decide to scrap the whole enterprise. Apart from the fact that this presupposes that God is endowed with Middle Knowledge—an extremely controversial and, in my view, ultimately problematic assumption—it also assumes that the amount and/or distribution of evil currently in the world makes it such that existence is not worth having (if this is not what is being assumed, then the current evil in the world is no reason for God to have halted the project, which means the objection disappears). But if the atheist really thinks existence is not worth having, then he is committing himself to the view that the moral thing to do is take people out of existence and to prevent others from coming in. If he is not prepared to accept this implication (and one would hope he is not), then the original objection again disappears.
You may also be interested in A Good Reason For Evil and When Good Is Evil and
The Strength of God And The Problem Of Evil and Augustine On Evil
Also The Problem of Evil