You seem to be putting the full weight of moral responsibility on God because he does not always act to stop it. Don't forget that the individual is still morally responsible for the action. Also, victims are sinners. Scripture teaches that all have sinned and fall short of the glory of God. Suffering and death are the penalty of sin. No one is good. Why should we be entitled to mercy? God needs a monumental excuse for being just and allowing people to receive the penalty of sin? What is amazing is that God comes into the world, lives the sinless life we fail to, and then takes the penalty upon himself for all those who believe in him. We are certainly not entitled to mercy and yet he provides a way to receive mercy.
If God is all-powerful then he could have made a universe full of people who are not sinners. He chose to, at the very least, allow sin to randomly come into the world, if it wasn't deliberately part of his plan. If he's all-powerful, then everything that happens, including people sinning, happens either because he wanted it to, or because he rolled a metaphorical die, shrugged and said "ok, I'll allow it".
Free will theodicies of course argue that free will is such a good thing that it would be worse to deny it than to allow its consequence, namely (they argue) the possibility of sin randomly (i.e. by nondeterministic so-called "free will") coming into the world. IIRC you've already said you reject such free-will theodicies (can I assume you're probably a Calvinist?), but even if not: those fail because they misconstrue what free will even is (randomness is not freedom), and so even if free will is an overriding good that could justify allowing the horrors that exist in the world if those were a necessary concession to it, they're not; if there were an all-powerful God, he could have made a universe full of free-willed people who were born as perfect saints and would never choose to sin, even though they could choose to sin if they had any reason to want to do so, which they wouldn't.
Creating known-defective living creatures and then letting them suffer from their defects or worse still, actively punishing them instead of just fixing them, is not the act of an all-good, all-powerful being. It sounds like the kind of thing an evil being would do, though it could maybe be the best that a less-than-all-powerful being could do (or an unfortunate oversight by a less-than-all-knowing being), but then in any of those cases that being wouldn't count as God.
Edicts are not what I base morality on. The absolute standard for morality that a Christian holds to is God himself. Not an edict. That is completely different than a moral system chosen arbitrarily as you seem to be suggesting.
How do you know what God is like, what he wants, or what he says is moral, and how do you reconcile what you think you know in that regard with people of other religions who think they know that God is/wants/says something different? How is your religion not just as "arbitrarily" chosen as any non-religious ethical system? People, including religious people, have to pick, somehow, for whatever reasons, what they think is the right way to tell good from bad. None of them think their choice is arbitrary -- they all have their reasons -- and all of them think they've got the right answer, even though others disagree. Anyone who's not a moral nihilist will agree that at least one of them might have the right answer, even though others disagree.
The moral nihlist of course will say that their disagreement is evidence that none of them, religious or otherwise, have the right answer, because (they say) no answer is right or wrong, they're all just arbitrary choices, including the religious views. But you and I both disagree with that. All I'm saying is that there are some views, chosen from among the various differing views (including the different religions), according to which some things are objectively right and wrong regardless of whether or not any gods exist. It doesn't follow of logical necessity from the rejection of God's existence to the rejection of objective morality; there are other alternatives. There's disagreement about which alternative is right, sure, but there's disagreement among the religious about which religion is right too, and that's not automatically proof that they (either religions or secular ethical systems) are all wrong.
You are right that I am arguing for moral nihilism as the only system an atheist can hold to and be philosophically consistent.
That's not what I said. I said you're arguing for moral nihilism, period; albeit unintentionally. If you say "look, there's disagreement, therefore nobody's right or wrong about it" then you're arguing against all religious morals too because there's disagreement there too. I know you're not trying to do that, which is why I point it out; your argument leads to conclusions you would object to, therefore you should abandon the argument.
In a naturalistic worldview, all we are is matter in motion. Why is it wrong for matter to put holes in other pieces of matter? Morality is immaterial. Its absurd to argue for morality when you are standing on a platform that says all that exists is matter. You have no basis to call one way more correct than another. They are just different and meaningless. I agree that most people believe that morality exists. But that doesn't mean it makes any sense in your system. In fact it is a deep problem for atheism. You know it exists so you have to contradict your worldview to account for it. It only makes sense in a biblical worldview.
First of all, atheism is not equivalent to materialism, though I'll grant they're often found together. But there are all kinds of different answers proposed to this question. I can't teach you the entire field of meta-ethics, but I can give you a brief overview of it, building out from your own divine command theory:
Divine Command Theory is a form of universalist ethical subjectivism. Universalism means what we've been calling "objective" or "absolute" so far here: it applies to everyone everywhere always. Subjectivism means that it holds what's good or bad to be contingent on the wants, beliefs, intentions, commands, etc, of some kind of person or agent. In this case, that person or agent is God. What it means for something to be good, according to divine command theory, is to be commanded by God; and to know what's good or bad, you just look up what God commanded, in the book(s) that he dictated.
The most similar theory is another form of universalist ethical subjectivism, Ideal Observer Theory. This hold that what it means to be good is to be consistent with what a hypothetical Ideal Observer, a perfectly rational and perfectly knowledgeable person (sometimes said to be perfectly empathic, sympathizing with all points of view) would intend or command, if such a being existed. You might think of this as "good is what God would command, if he existed"; and to know what's good or bad, you have to gather as much knowledge (and consider all points of view) and think as rationally as possible about it, meaning that we can at best approximate what might be good or bad, but never know it with certainty. Still, something either is good or bad, objectively, on this view, even if we're not entirely sure what is which. I'm slightly sympathetic to this, but more for its picture of moral epistemology (how we find out what's good or bad) and kind of a poetic gloss of my true view, than as a definition or ontology of morality per se.
The next most similar theory is cultural relativism, which is a relativist (non-universalist) form of ethical subjectivism that holds that what it means to be good, relative to a given community, is to be consistent with the consensus will of that community. Being a form of relativism, this doesn't really help us here though, so let's skip it. The next most similar theory is individualist ethical subjectivism, which is a relativist form of subjectivism that holds that what it means to be good, relative to an individual, is to be consisted with that individual's will; but this is even worse for our purposes so let's skip it too.
Moving out of subjectivist theories into objectivist theories (those which hold good and bad to be independent of what anyone thinks/commands/etc, which are thus necessarily also universalist, holding that the same thing is good or bad everywhere always), there's ethical naturalism, which holds that "goodness" is some kind of natural property; usually, something like the utilitarian definition of the greatest pleasure for the greatest number. That's just what it means for something to be good, according to them, and we know what is good or not by observing the pleasure that it brings to people (and inferring from that about how much pleasure other things might bring to other people).
This, however, faces the kind of challenge you seem to be raising, which is called the "open question argument": if they say that something is good because it causes more pleasure to more people, you can then ask "but why is causing pleasure to people good?" Usually, adherents argue "...it just is, obviously, duh! how could you think otherwise, that bringing pleasure to many people is bad!?!?" and honestly it does kind of seem that obvious to me, but I'm not strictly an adherent to this view because it really is an open question, and one that could very well be turned on Divine Command Theory too: "you say that this is good because God commands it, but why is obeying God's commands good?"
The alternative posed by the originator of the Open Question Argument is called ethical non-naturalism, which is still an objectivist view (holding morality to be independent of anyone's thoughts/commands/etc), which posits that there are non-natural moral properties of events. These don't necessitate the existence of God, but this does run afoul of eliminative materialism, and turns into, at best (for the materialist) some kind of property dualism: even if only material things exist, they have properties other than their physical ones, namely moral ones. There are two epistemic stances within this view, about how we know those moral properties: one is "intuitionism", which holds that we have some innate, intuitive, intellectual grasp of what moral properties go with what kinds of things; and the other is "moral sense theory", which holds that we have some kind of nonphysical senses that can detect moral properties. I don't really buy this; too much spooky weirdness, raising more questions than it answers.
Ethical rationalism is hard to categorize but definitely still within the umbrella of objectivism. It holds that moral statements are true and false in the same sort of way that logical or mathematical ones are. They don't require any kind of moral substances, physical or otherwise, to be there to make claims about morals true or false, as they're more like relations between ideas that just have to be true or false in any possible universe, by the sheer structure of the concepts involved. Immanual Kant is the big proponent of this with his deontology, holding morality to be just about being self-consistent with your will, and I have some strong sympathies here, but don't fully buy this as a moral ontology exactly, though it's close.
All of the above falls within the umbrella of cognitivism or descriptivism (those are technically slightly different, which we'll get to in a second), which holds that moral assertions are claims of fact, the subject of beliefs, that can be true or false; that there is something in reality (broadly construed, to include things like God for those Divine Command Theorists who think he's real) that is a moral fact, which moral assertions are trying to correctly describe. All of them so far claim that there are some moral facts which are true. The last kind of cognitivist or descriptivist theory, on the other hand, moral error theory, claims that that is indeed what moral assertions are trying to do, but since there's no such thing as a moral fact (they say), all of them fail at it: all moral assertions are just false. This of course leads to nihilism, which is no use to use here so let's skip it.
Contrary to cognitivist (or descriptivist) theories like all of the above, there are non-cognitivist (or non-descriptivist) theories that claim that moral assertions aren't trying to describe things, the way sentences like "that elephant weights 1.5 tons" are, but are performing a different kind of speech-act. Most of these are relativist to the point of nihilism and thus no help to us: emotivism and expressivism claim that things like "murder is wrong" are really just expressions of emotion like "boo murder!", and imperativism says that something like "murder is wrong" just means "don't murder"; things that aren't the sort of thing that can even be true or false because they're not making descriptive claims in the first place. That's useless so let's move on.
Last but not least, there is a universalist form of non-descriptivism (but technically cognitivism) view called universal prescriptivism, which claims something like this: moral assertions are not trying to describe anything, but are rather prescribing things, functioning very much like imperative sentences, but with an important difference. Normal imperatives have the implied subject of "you", always. "Don't murder" means "you, don't murder!", and on this view would be equivalent to "you ought not murder". Broader moral claims like "murder ought not be done" then translate into imperative-like things that we don't quite have grammar for in modern English: something very similar to the expression "saints be praised!", which is an imperative ordering praising of saints, but not addressed to anyone in particular, not like "you, praise the saints!"; it's exhorting anyone, anywhere, always to praise the saints. This part is my own invention, but I would actually argue that substituting "be" for "is" (or "are", etc) in a descriptive sentence turns it into the imperative equivalent of a moral sentence. With that established, that moral assertions are hidden universalized imperatives, the question is then how do we privilege some imperatives over others; imperatives can't be true or false, technically, but they might be good or bad, expressing intentions either to be adopted or not, the way that descriptive sentences express beliefs to be either adopted or not. Some of these can be worked out via a priori reasoning, just seeing if it's the kind of thing that could be universally prescribed without contradiction, and in this way it's a lot like Kantian ethical rationalism.
But then there's further consideration to take beyond just those broad be-logically-consistent-in-your-universal-prescriptions ones, much akin to how a priori logic can tell us a lot about ways the universe can or can't be, but then there's a lot of further questions that need to be settled empirically. We're venturing into my own philosophy here now, but... oh hell, I'll just give you a really quick gloss of my own views because goddamn time flew and it's late and this took way more time than it felt like to write.
The scientific method is the correct method of adjudicating disagreements on matters of description, of belief, of facts, and it proceeds from these axioms: there is some correct answer or another to be had (anti-nihilism, or objectivism, which in this case means realism -- if it's true, it's true for everyone), but nobody's answer is privileged or authoritative as the special correct-by-default or beyond-question answer (anti-fideism, or criticism), so anybody's answer might be correct until it can be ruled out (liberalism), and besides showing self-contraction, the only way left to rule things out, without any authority to turn to, is by appealing very carefully and thoroughly to our common, shared experiences (phenomenalism, which in this case means empiricism, in the sense that "it sure looks false" is, broadly speaking, evidence that something's false), slowly and forever narrowing in closer and closer on the universal truth.
The moral analogue of that, the correct method of adjudicating disagreements on matters of prescription, of intention, of norms, proceeds from analogous axioms: there is some correct answer or another to be had (anti-nihilism or objectivism again, in this case meaning altruism -- if it's good, it's good for everyone), but nobody's answer is privileged or authoritative as the special correct-by-default or beyond-question answer (anti-fideism or criticism again), so anybody's answer might be correct until it can be ruled out (liberalism), and besides showing self-contradiction, the only way left to rule things out, without any authority to turn to, is by appealing very carefully and thoroughly to our common, shared experiences (phenomenalism, which in this case means hedonism, in the sense that "it sure feels bad" is, broadly speaking, evidence that something's bad), slowly and forever narrowing in closer and closer on the universal good.
Liberalism and phenomenalism follow pretty trivially from objectivism and criticism jointly, but I have a special argument for objectivism and criticism; or rather, equivalently, against nihilism and fideism. In any endeavor, if you don't try, you will probably fail. You might be doomed to fail anyway, but if there were any chance to succeed, to seize that chance you must try. If you assume that success is impossible, you won't try; so, if you don't know whether or not success is possible, if you're starting out in complete ignorance, you have to assume success if possible or else you almost guarantee, by not trying, that it won't be, even if it could have been had you tried. Conversely, if you assume that success is inevitable, you won't try -- why bother, it's going to happen anyway -- and so, perversely, you will almost guarantee failure. In matters of trying to adjudicate between differing opinions, be they descriptive or prescriptive, if we start out in complete ignorance (or wind up there via an infinite regress, just saying "prove it" to each other forever every time one another offers a justification for the previous thing challenged), if we want to have any hope of figuring out what is the right answer, we have to try to figure it out, which can only be done by assuming that there is some correct answer to be found -- contra nihilism -- but not assuming that any particular answer is already the right one -- contra fideism. That gives you objectivism and criticism, which give you liberalism and phenomenalism, which together break down along descriptive/prescriptive lines into the critical empirical realism that is the scientific method, and its moral analogue, liberal hedonic altruism.
Neither of which depend on appeals to God (or any other authority).
Man that was a long-ass tangent. Anyway...
As for the nihilist, when he states the problem of evil, he is implying that he knows there is an absolute basis for morality. Yet he rejects it with his philosophy. Without an absolute basis for morality, the argument is meaningless. No. It shows deep down he does know morality because God made him that way.
I don't need to convince the nihilist that theres such a thing as good and evil. He already knows it and betrays that when he makes the problem of evil argument.
You still misunderstand. The moral nihilist doesn't have to agree that there is such a thing as evil to use the argument, only to point out that your belief in evil in the world contradicts your belief in an all-good (and all-knowing and all-powerful) God. The moral nihilist might very well concede that there's some kind of all-knowing all-powerful thing, that does whatever it wants and that's whatever because there is (he says) no morality at all, but then he hears you talking about your version of that thing being all-good, and yet also talking about things in the world being evil, and he says to you "Wait, if you think this all-knowing all-powerful thing is all-good, how can you think that anything is evil? Wouldn't everything have to be good, if there was such a being? So either everything is good, or your God isn't all-good, or maybe he's not all-powerful and just couldn't help it... or he's not all-knowing and doesn't know there's a problem... or, you know, there's no such thing as good and evil. But either way, you're wrong."