[Background here. My ragged and too-large-for-a-comment-box thoughts below...]
This "Hell kerfuffle" seems to be as easily (or not, depending where you stand philosophically) resolved as Plantinga did for the once-famous "analytical argument from evil". See God, Freedom, and Evil. Just as there's no deductive proof God could create a world free from all free human sin, neither is there any such deductive basis for claiming God could craft a hell that would eliminate all human perdition. It hinges on so to speak temporalizing modality (whereby, any number of "redos" for people in purgatory are analogous to modal worlds for God to create). Honestly, the God of Daylight Atheism sounds just like the God most atheists loathe: controlling, paternalistic, mushy-gushy, etc.
In any case, I admit I do find the whole "What Dreams May Come" scenario tacky and naïve. For one thing, the whole point of conscience is that man can freely and consciously reject good for evil. Why there wouldn't be one single person (or many) who did the same, no matter how long purgatory lasted, seems perfectly reasonable and realistic to me. There are countless moments of life as we know it in which we do see the light but still snuff it out. This IS hell on a temporal scale; hell IS such snuffing of the light on an eternal scale; and both are free, human realities. Denying supernatural reality in general is the fastest (intellectual) way to deny, in our innermost lives, in our own personal stories, the real, palpable, unmistakable – and yet still refusable -- presence of divine grace in the soul, the very "energy" of God that enables us either to accept Him. If it is true that God speaks to every soul clearly, perhaps even if in a way only that soul can decipher (and I do believe that's true; cf John Paul II's Veritatis Splendor), then it's really academic whether rejecting His grace happens only once, like a once-for-all survey, or eternally in hell, since in either case it's just as radical and authentic and infinite rejection of God. Jesus said, in an exceptionally cryptic warning, "He who has, shall receive more; he who has not, shall lose what he already has." Heaven is the fulfillment of the grace we accept, by grace, now; hell is the opposite eternity. God "throws" no one to hell; he watches them go, "punishing" them with/"condemning" them to their own freedom. It's no mere cliché that GOD DESIRES ALL PEOPLE TO BE SAVED; it's divine revelation.
Life, unfortunately, is not like Nintendo. When you die, you can't just "reset" and play again. Why is this important? We all know the psychology of Nintendo: don't sweat it if you suck this time around, just die and reset. Imagine, though, if all humanity could have the same "reassurance". Would this really, honestly, induce wise stewardship of God's mercy and the grace to become holy (even if it were eternal)? No; if experience is any guide, humans being human, it would induce indolence and apathy. Paradoxically, the only way God could ensure conditioning "Hell: Population 0" would be by either erasing our purgatorial memories (so we don't get indolent), or retaining enough memory so we get sharper each time. But again, even under these conditions, there's just no guaranteeing everybody in the end gets a 100. Those who get memory wipes could, conceivably, fail every single time unto eternity. Those with memory retention could just as conceivably remain stubbornly prodigal with grace and thus fail every time, even just "for kicks" (since, hey, who knows if "hell" is REALLY all that bad, eh? – I'll try anything once!). Even those with memory retention AND the implanted motivating illusion that "This is my last time around – God's had enough!", could STILL drop the ball, for whatever reason, since, according to the whole doctrine of hell, it is possible that we freely reject God, even with the warning of hellfire all about us. It's called the MYSTERY of evil because, as Aristotle and Plato could never grasp, it DOES NOT MAKE SENSE, but people can and do choose the un-good.
Moving on. Second, for me as a Catholic (former Calvinist), there's simply no "washing of the hands" about death and hell. Not only is not just "their problem" – since I must answer to God as well! – but it is also positively my problem as one called to "love God by loving all mankind." Concretely, at every Mass we Catholics (and Orthodox) literally pray for the dead – all the dead souls, but especially dead Christians – so in a very real way, the Christian life is defined by so to speak "defying hell" in the hope of God's mercy. The same God who calls us to fear hell, then, is He who calls us to rescue any and all from it. Hell is a so to speak moral boundary condition – If you do this and do not repent, you will die forever (hell) – but it is not any mortal's place to put this or that specific person beyond that boundary (in hell). Hell is a moral and spiritual reality for all mankind; but for whom specifically, I cannot say other than myself. The Church, you'll recall, beatifies specific persons in heaven; she does not "anti-beatify" persons in hell.
Believe it or not, there are very humane and deeply Christian considerations about hell, human fate, and divine sovereignty. For example, I highly recommend 1) Fr. William Most's Grace Predestination & Salvific Will God; 2) von Balthasar's Dare We Hope; and, though it suffers an admittedly huge anti-Western bias, 3) Kalomiros's "River of Fire".
Here are brief intros,
1) http://www.ewtn.com/library/SCRIPTUR/1THOMIST.TXT and
2a) http://www.theuniversityconcourse.com/II,9,5-6-1997/Healy.htm, 2b) and the third itself,
(BTW, I do not go so far as to claim hell WILL BE empty, since the whole point, ex hypothesi, is that a just God infallibly and perfectly foresees and judges those who freely enter hell according to the sufficient truth they had, but I can't be stingy with the virtue of hope.)
Third, precisely because Christianity is rooted in a personal, and in fact, superpersonal, encounter – between "I and Thou", between "me, you, and God" – then there is something infinitely valuable about each person as such. Meaning, the enormity of hell is based (inversely, bizarrely but authentically) on the gravity of each soul in God's eyes. God is not Big Brother; he will not allow us to be "reprogrammed" over a series of interrogations, in which the final result is that our embrace of Big Brother is in fact our own suicide. Nor is God a scientist that reprograms us by a series of rehabilitative Clockwork Orange sessions ("You vill be guht!"). (As an aside, read that novel's last chapter to see what I mean about indefatigable wil to be evil.) Why does God not resort to such Pavlovian means? Because such "effective" reprogramming in itself obliterates who we in fact are. God could, I suppose, "rescue" every soul by relentlessly condition them to "choose right" eventually. (Incidentally, this is an Origenist heresy, rejected by the Church in the 6th century, known as the apokatastasis panton.) But would those souls ultimately really have chosen God? You would end up in heaven – but you would not end up yourself. But even then, to recall my first point, what if after all that effort, a soul still only said, "Thanks but no thanks, I don't need your 'charity'!"? Sounds familiar doesn't it…?
Certainly enough for one night. I don't know how well I can reply to any comments, busy with work and whatnot, but I am here … observing all, double good, heheh.