God's government rests on love. The moral foundation of the universe is based on reason, love, and justice. If God ever chose to act arbitrarily and exercise superior force, there would be a danger that He would have to rule by fear, rather than love. What He wants are people who love and serve Him voluntarily, not merely because they are afraid of Him. When God allows Satan a certain amount of leeway, He is permitting the exercise of free will on the part of one of His created beings. He is carrying forth a drama on earth that is cosmic in nature, whereby men and women, created in the image of God, freely choose to serve Him.
If God just reached out with His power and struck Satan, other created beings could say He did it because He could not win by love, and so He had to resort to force and fear.
God's plan for the triumph of love over hate is breathtaking. God placed on earth a being--man--who was made in God's image. Then He permitted Satan to tempt man, and man gave in to bring about his own downfall. Then before all of the angels in heaven, there unfolded the drama of redemption whereby God Himself sent His Son to die for fallen man. The church began to grow out of the multitudes who chose freely to follow God's love rather than to participate in Satan's rebellion.
The time will come when God has assembled a body of people who freely love Him, which will prove beyond any doubt that love is the most powerful force in the universe. With the triumph of love complete, God will then deal with Satan.
First, God will put Satan in a place where he cannot escape for a thousand years (see Revelation 20:2-3). Then God will demonstrate how beautiful the world would be without Satan. At the end of that time, Satan is going to be set free, will deceive the nations again, and will be defeated totally. Then God will cast him into eternal torment.
Satan is a tool of God's love in the sense that he forces us to see God's loving patience (see I Timothy 1:18-20, I Corinthians 5:3-5). People would have a harder time understanding the love of God without the obvious evil and hatred of His enemy. But God did not cause Satan to rebel just so we could have a better picture of His love. Satan sinned willingly because of pride. He thought his wisdom exceeded that of God's (see Isaiah 14:12-15, I Timothy 3:6). We must always remember that the devil and God are not coequal (see Ezekiel 28:13-19). The devil is a creation of God, and God can do with him whatever He pleases (see Revelation 20:7-10).